reports

Understanding geographic variation in health care costs in British Columbia

Vancouver, BC, Canada: University of British Columbia (doctoral dissertation).

University of British Columbia, Vancouver, BC, Canada

Amidst concerns about escalating health spending, examining variation in health care  delivery may reveal opportunities for improved efficiency. Influential research in the United  States (US) has concluded that health care spending and service use vary substantially from  place to place, and this cannot be explained by differences in the health status of populations or  by better outcomes of care in higher-spending regions. Whether similar patterns exist in Canada  is not clear.
This thesis uses administrative health data to examine how and why health care use and  costs vary within the Canadian province of British Columbia (BC). We developed networks of  patients, physicians, and hospitals that correspond to actual service use, in order to ensure that  observation of variation was not obscured by unit of analysis. We also identified areas of the  province representing distinct health service environments, as an improvement over existing  urban/rural classifications in understanding the role of geographic context. Access to individual level  data allowed more complete adjustment for population characteristics than is typically  possible.
In contrast to the US, this thesis suggests that variation in costs of physician and  hospital services in BC is largely explained by population health status. The very different  environments for health services that exist among metropolitan, non-metropolitan, and remote  regions of the province also explained some area-level variation. Despite modest variation in  total costs, there are clear differences in patterns of service use across the province due to  substitution between categories of care (such as inpatient and outpatient, or generalist and  specialist services). Though differences in costs are modest, marked differences in health  outcomes are evident, and require further scrutiny.
Results show there are no areas with systematically higher volume or more intensive  service provision for populations with similar health needs. However, this does not mean that  important variation does not exist and cannot be uncovered. It may be that examining variation  at the level of provider, among population groups, or in treatment for specific diseases or  conditions will yield more actionable results. Ultimately policy reforms aimed at system-wide  quality and efficiency, rather than targeted at high-spending regions, will likely prove most  promising.