What explains the differences in efficiency among different regions? Is it supply driven?
The supply of such resources as hospital beds and specialist physicians does drive utilization – where there are more hospital beds per capita, more people will be admitted (and will be readmitted more frequently) than in areas where there are fewer beds per capita. Economically, it is important for hospitals to make sure that all available beds generate as much revenue as they can, since an unoccupied bed costs nearly as much to maintain as an occupied bed. Similarly, where there are more medical specialist physicians per capita, there are more visits and revisits to medical specialists. Other reasons for the variations in efficiency are related to practice style – the way physicians in the region practice medicine (using more or fewer prescriptions or tests, for example).
