Sources of regional variation in healthcare utilization in Germany

We examine sources of regional variation in ambulatory care utilization in Germany. We exploit patient migration to examine which share of regional variation in ambulatory care utilization can be attributed to demand factors and to supply factors, respectively. Based on administrative claim-level data we find that regional variation can be overwhelmingly explained by patient characteristics. Our results contrast with previous results for other countries, and they suggest that institutional rules in Germany successfully constrain supply-side variation in ambulatory care use between German regions for most patients. Furthermore, we find that both demographics and other patient characteristics substantially contribute to regional variation and that causes of regional variation vary when comparing different regions within Germany.