Regional Patterns in Medical Technology Utilization (PDF)

The U.S. health-care system is characterized by the rapid adoption and diffusion of medical technologies and high regional variation in health-care utilization and spending. I examine the correlations in the adoption and utilization rates of sixteen outpatient health-care technologies of differing quality across US metropolitan areas among nonelderly adult beneficiaries of employment-sponsored insurance in 2006-2010. I find three patterns underlying their use. One relates to the high use of diagnostic and screening services, one to the high use of pharmaceuticals, and one to the low-quality management of pain. In general therefore, utilization correlates by type of technology more than quality, which may contribute to explaining the lack of relationship between spending and outcomes observed in the U.S. health-care system. I further show that these correlations are not confined to the sixteen technologies under study but relate to medical utilization across categories of services and pharmaceuticals. I also connect these patterns with local demographics. The first factor is associated with higher education, income, population density, and provider supply and with lower social capital. The second factor is also associated with higher education, income, and provider supply, but with lower population density and higher social capital. The third factor is associated with lower education, income, social capital, population density, and provider supply.

Anne E. Hall

JEL Code(s) I10 Published