Place-based variation in health care: evidence from mandatory movers in the U.S. military health system

There is increasing evidence on regional variations in US Medicare health care utilization based on older patients who move. Yet moving for the elderly population is typically endogenous, and evidence is limited for younger populations. In this paper, we harness the mandatory migration of military personnel to estimate supply and demand factors in a system of care for younger enrollees in which military physicians are salaried and copayments and deductibles are negligible. Our preferred estimates imply that supply effects explain between one-half and two-thirds of overall regional variation. These variations cannot be explained by differences in quality of care, but appear consistent with location-specific differences in physician beliefs. We are grateful for financial support from the Department of Defense (DoD) (Award HT94022210005) and for very helpful comments from Amy Finkelstein, Robert Kaestner, Edward Norton, two anonymous reviewers, and the editor. The contents, views or opinions expressed in this publication or presentation are those of the author(s) and do not necessarily reflect official policy or position of Uniformed Services University of the Health Sciences, the DoD, or Departments of the Army, Navy, or Air Force. Mention of trade names, commercial products, or organizations does not imply endorsement by the U.S. Government.