What accounts for the regional differences in the utilisation of hospitals in Germany?

There are huge regional variations in the utilisation of hospital services in Germany. In 2007 and 2008 the states of Hamburg and Baden-Württemberg had on average just under 38 % fewer hospitalisations per capita than Saxony-Anhalt. We use data from the DRG statistics aggregated at the county level in combination with numerous other data sources (e.g. INKAR Database, accounting data from the National Association of Statutory Health Insurance Physicians (KBV), Federal Medical Registry, Germany Hospital Directory, population structure per county) to establish the proportion of the observed regional differences that can be explained at county and state levels. Overall we are able to account for 73 % of the variation at state level in terms of observable factors. By far the most important reason for the regional variation in the utilisation of in-patient services is differences in medical needs. Differences in the supply of medical services and the substitutability of outpatient and inpatient treatment are also relevant, but to a lesser extent.