Small Area Variations in Health Care Delivery

Health information about total populations is a prerequisite for sound decision-making and planning in the health care field. Experience with a population-based health data system in Vermont reveals that there are wide variations in resource input, utilization of services, and expenditures among neighboring communities. Results show prima facie inequalities in the input of resources that are associated with income transfer from areas of lower expenditure to areas of higher expenditure. Variations in utilization indicate that there is considerable uncertainty about the effectiveness of different levels of aggregate, as well as specific kinds of, health services. Informed choices in the public regulation of the health care sector require knowledge of the relation between medical care systems and the population groups being served, and they should take into account the effect of regulation on equality and effectiveness. When population-based data on small areas are available, decisions to expand hospitals, currently based on institutional pressures, can take into account a community's regional ranking in regard to bed input and utilization rates. Proposals by hospitals for unit price increases and the regulation of the actuarial rate of insurance programs can be evaluated in terms of per capita expenditures and income transfer between geographically defined populations. The PSRO's can evaluate the wide variations in level of services among residents of different communities. Coordinated exercise of the authority vested in these regulatory programs may lead to explicit strategies to deal directly with inequality and uncertainty concerning the effectiveness of health care delivery. Population-based health information systems, because they can provide information on the performance of health care systems and regulatory agencies, are an important step in the development of rational public policy for health.