Background: Several studies from different countries have documented sizeable geographic variation in healthcare expenditures. However, it remains a pending question how much of this variation is caused by differences in population needs, or, alternatively, service supply. In the present study, we modelled geographic variation in hospital expenditures per capita controlling for population healthcare needs using data from a large health survey combined with healthcare cost data. In order to explore whether the pattern of geographic variation changed over time, the analysis was repeated with a three-year interval. Methods: The study is based on the Danish health survey “How are you?” from 2010 (n = 33.776) and 2013 (n = 33.285) combined with register-based cost data. Two-part regression models were used to predict geographic variation in hospital expenditures controlling for socio-demography, health behaviour, health status and morbidity. Results: In 2010, the difference between the areas with the highest and the lowest expenditure was 706 € per capita. After model-based direct standardisation, about half of the areas approached the overall mean expenditure, whereas the other half moved further away. The same was observed in 2013, although, the pattern of geographic variation had changed substantially. Furthermore, in 2010 the overall variation was only slightly smaller after standardisation, whereas in 2013 a substantial reduction from 800 € to 484 € per capita resulted. Conclusions: Geographic variation in healthcare expenditures were generally attenuated after standardisation, but a considerable variation remained indicating a substantial supply-side effect. The study has sparked off several management initiatives targeting better understanding and thereby possibly modulation of geographic variation in the healthcare system. Key message: The study has sparked off several management initiatives targeting better understanding and thereby possibly modulation of geographic variation in the healthcare system.
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