Causes of regional variation in healthcare utilization in Germany

Healthcare utilization varies widely between regions. Yet, the causes of regional variation are still not well understood, and they can also differ between countries and institutional settings. We exploit patient migration to examine which share of regional variation in ambulatory care use in Germany 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.