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Further Issues in Small Area Variations Analysis

In this article, I examine Wennberg's "practice style" hypothesis and the literature on variations among small areas. According to Wennberg, geographic variations in rates of per capita use for many clinical procedures arise mainly from differences over what constitutes appropriate care. I show, however, that the role of practice style in explaining variations among areas has not been clearly demonstrated. I also argue that the practice style hypothesis can neither be established nor refuted by the methods traditionally used to study small areas and, moreover, that inferences about practice style variations cannot be drawn from differences among areas in their rates of use. I thus conclude that more research at the micro level in the practice patterns of the individual physician is needed before major health care initiatives based on small area methodology are undertaken.