Abstract
BackgroundTo indicate inefficiencies in health systems, previous studies examined regional variation in healthcare spending by analyzing the entire population. As a result, population heterogeneity is taken into account to a limited extent only. Furthermore, it clouds a detailed interpretation which could be used to inform regional budget allocation decisions to improve quality of care of one chronic disease over another. Therefore, we aimed to gain insight into the drivers of regional variation in healthcare spending by studying prevalent chronic diseases.MethodsWe used 2012 secondary health survey data linked with claims data, healthcare supply data and demographics at the individual level for 18 Dutch regions. We studied patients with diabetes (n = 10,767) and depression (n = 3,735), in addition to the general population (n = 44,694). For all samples, we estimated the cross-sectional relationship between spending, supply and demand variables and region effects using linear mixed models.ResultsRegions with above (below) average spending for the general population mostly showed above (below) average spending for diabetes and depression as well. Less than 1% of the a-priori total variation in spending was attributed to the regions. For all samples, we found that individual-level demand variables explained 62-63% of the total variance. Self-reported health status was the most prominent predictor (28%) of healthcare spending. Supply variables also explained, although a small part, of regional variation in spending in the general population and depression. Demand variables explained nearly 100% of regional variation in spending for depression and 88% for diabetes, leaving 12% of the regional variation left unexplained indicating differences between regions due to inefficiencies.ConclusionsThe extent to which regional variation in healthcare spending can be considered as inefficiency may differ between regions and disease-groups. Therefore, analyzing chronic diseases, in addition to the traditional approach where the general population is studied, provides more insight into the causes of regional variation in healthcare spending, and identifies potential areas for efficiency improvement and budget allocation decisions.
Highlights
To indicate inefficiencies in health systems, previous studies examined regional variation in healthcare spending by analyzing the entire population
We showed the results of the diseaseapproach in addition to the results of the traditional approach for each step taken in the analysis of regional variation in spending, which is to 1) describe the unadjusted regional variation in healthcare spending, and 2) explore the extent to which demand and supply factors explain regional variation in healthcare spending
Data sources We used data from the Dutch Public Health Monitor (DPHM) for the year 2012 [17]. We merged these data at the individual level with demographic variables from Statistics Netherlands and nationwide claims data which we obtained from Vektis [18]
Summary
To indicate inefficiencies in health systems, previous studies examined regional variation in healthcare spending by analyzing the entire population. Population heterogeneity is taken into account to a limited extent only It clouds a detailed interpretation which could be used to inform regional budget allocation decisions to improve quality of care of one chronic disease over another. Demand factors labeled as medical need, such as demographics and health status, are generally considered justifiable causes of variation in healthcare spending. Regional variation as a result of supply factors (e.g. competition, capacity or physician beliefs) is considered to be generally undesirable. In empirical studies, those factors have been found to be of varying impact, depending on the study context, or system factors System factors such as (insurance) regulation, price setting or payment methods influence the dynamics of demand and supply
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