Place-Based Variation in Health Care: Evidence from Mandatory Movers in the U.S. Military Health System

There is increasing evidence on regional variations in US Medicare health care utilization based on older patients who move. Yet moving for the elderly population is typically endogenous, and evidence is limited for younger populations. In this paper, we harness the mandatory migration of military personnel to estimate supply and demand factors in a system of care for younger enrollees in which military physicians are salaried and copayments and deductibles are negligible. Our preferred estimates imply that supply effects explain between one-half and two-thirds of overall regional variation. These variations cannot be explained by differences in quality of care, but appear consistent with location-specific differences in physician beliefs.