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Geographic Variations in Health Care

What Do We Know and What Can Be Done to Improve Health System Performance?

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Variations in health care use within a country are complicated. In some cases they may reflect differences in health needs, in patient preferences or in the diffusion of a therapeutic innovation; in others they may not. There is evidence that some of the observed variations are unwarranted, signalling under- or over-provision of health services, or both. This study documents geographic variations for high-cost and high-volume procedures in select OECD countries. It finds that there are wide variations not only across countries, but within them as well. A mix of patient preferences and physician practice styles likely play an important part in this, but what part of the observed variations reflects over-provision, or whether there are unmet needs, remain largely unexplained. This report helps policy makers better understand the issues and challenges around geographic variations in health care provision and considers the policy options.

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Australia: Geographic variations in health care

This chapter summarises data and utilisation rates of a select number of health care procedures and activities within Australia, analysed by Medicare Local.

In 2010-11, the amount of variation across Medicare Locals was smallest for caesarean sections (a 1.6-fold variation) and largest for cardiac catheterisation (a 7.4-fold variation). Variations were somewhat lower when based on the 10th and 90th percentile values of the distribution of procedure rates, ranging from 1.3-fold for caesarean section to two-fold for cardiac catheterisation and knee arthroscopy. Cardiac revascularisation procedures, hysterectomy and knee replacement showed relatively middle range variation across Medicare Locals.

The chapter also describes policies that have been used to address variations, such as the establishment and promotion of national clinical guidelines for cardiac care; the development of criteria to define priorities for hip and knee replacements; and the introduction of payment incentives to encourage the provision of evidence-based health care.

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