Background:Appropriate management of care – for example, avoiding unnecessary attendances at, or admissions to, hospital emergency units when they could be handled in primary care – is an important part of health strategy. However, some variations in these outcomes could be due to genuine variations in health need. This paper proposes a new method of explaining variations in hospital utilisation across small areas and the general practices (GPs) responsible for patient primary care. By controlling for the influence of true need on such variations, one may identify remaining sources of excess emergency attendances and admissions, both at area and practice level, that may be related to the quality, resourcing or organisation of care. The present paper accordingly develops a methodology that recognises the interplay between population mix factors (health need) and primary care factors (e.g. referral thresholds), that allows for unobserved influences on hospitalisation usage, and that also reflects interdependence between hospital outcomes. A case study considers relativities in attendance and admission rates at a North London hospital involving 149 small areas and 53 GP practices.Results:A fixed effects model shows variations in attendances and admissions are significantly related (positively) to area and practice need, and nursing home patients, and related (negatively) to primary care access and distance of patient homes from the hospital. Modelling the impact of known factors alone is not sufficient to produce a satisfactory fit to the observations, and random effects at area and practice level are needed to improve fit and account for overdispersion.Conclusion:The case study finds variation in attendance and admission rates across areas and practices after controlling for need, and remaining differences between practices may be attributable to referral behaviour unrelated to need, or to staffing, resourcing, and access issues. In managerial terms, the analysis points to the utility of formal statistical analysis of hospitalisation rates as a prelude to non-statistical investigation of primary care resourcing and organisation. For example, there may be implications for the location of staff involved in community management of chronic conditions; health managers may also investigate whether some practices have unusual populations (homeless, asylum seekers, students) that explain different hospital use patterns.