Sources of small area variations in the use of medical care.
This paper develops an economic model of physician care utilization which incorporates the uncertainty and practice style hypotheses proposed by Wennberg and others as explanations of the substantial intermarket variations in per capita utilization rates of many medical and surgical procedures. Practice style, which is distinguished from inducement, is modeled as a set of physician beliefs about the production function of health. In the model, per capita utilization is decomposed into a first occurrences demand and an intensity demand. It is argued that the influence of practice style affects primarily the intensity with which physicians treat their patients. Alternative tests are proposed and carried out on a comprehensive aggregated measure of physician care utilization for market areas in Michigan. Although practice style is undoubtedly important for some individual procedures, the empirical results indicate that it is unimportant in determining either an aggregated index of market area utilization or the average intensity with which patients are treated by physicians.
D002391:Catchment Area, Health; D004470:Economics, Medical; D006296:Health Services / Q000706:statistics & numerical data*; D006302:Health Services Research; D008824:Michigan; D015233:Models, Statistical; D010818:Practice Patterns, Physicians' / Q000191:economics*; D011364:Professional Practice / Q000191:economics*