Do market-level hospital and physician resources affect small area variation in hospital use?

This study evaluates the effect of market-level physician and hospital reso urces on hospital use. If is anticipated that higher hospital discharges ar e associated with (1) greater hospital and physician resources, (2) more di fferentiated hospital and physician resources, and (3) higher levels of tea ching intensity in the community. Data on 14 modified diagnostically relate d groups (DRGs) and 58 hospital market communities in Michigan are analyzed during a 7-year period. Findings indicate that physician resources, hospit al resources, differentiation of hospital and physician resources, and teac hing intensity contribute only modestly to discharges, holding constant the socioeconomic attributes oft he community and adjusting for the variation in hospital use over time. With the inclusion of hospital and physician res ource variables, socioeconomic factors remain important determinants of the variation across market communities. Findings are discussed in terms of th eir implications for health care organizations, managed care programs, and cost control efforts in general.