Geographic variation in expenditures for workers' compensation physician claims

We examine interstate variations in the cost of claims for physician care using injury claims from Worker's Compensation, and consider some of the factors that may explain cost differences. Multivariate regression analysis is used to isolate state variations, while controlling for personal and injury characteristics, and state characteristics. Statistical analyses reveal considerable variation in expenditures for physician care of injuries across states, even after controlling for case mix and state characteristics. We also find that the presence of HMOs and of general practitioners as a percent of physicians are associated with lower claims, and that the percent of the state that is urban is associated with higher claims. The large variation in costs suggests a potential to affect the costs of physician care for work-related injuries.