Regional variation in the supply of general and medical practitioners and its consequences for inpatient service utilization

There is widespread concern about the consequences of the undersupply of outpatient care for the utilization of inpatient care. lt is common knowledge in the media that urban areas aften are characterized by an oversupply of health care providers, while rural areas suffer from shortage. As such, the undersupply of outpatient medical care in rural areas can lead to higher utilization of inpatient care due to both substitution effects and the possible disastrous health consequences if medical care is not received frequently or quickly enough. On the basis of administrative data from the largest sickness fund in Germany, this study analyzes the relationship between the district density of general as well as medical practitioner and the individual number of hospitalizations. We find evidence for a significant negative association between the share of general and medical practitioners in the population and the utilization of inpatient health care services, measured in the amount of yearly hospitalizations.