Defining Geographic Boundaries of Naturally Occurring Health Care Markets

The Medicare program maintains exhaustive records of hospitalizations, which makes it possible to define the patterns of use of hospital care. When Medicare enrollees are admitted to hospitals, the program’s records identify both the patients’ places of residence (by ZIP Code) and the hospitals where the admissions took place (by a unique numerical identifier). These files provide a reliable basis for determining the geographic pattern of health care use, because research shows that the migration patterns of patients in the Medicare program are similar to those for younger patients.

Medicare records of hospitalizations were used to define 3,436 geographically distinct hospital service areas in the United States. In each hospital service area, most of the care received by Medicare patients is provided in hospitals within the area. Based on the patterns of care for major cardiovascular surgery and neurosurgery, hospital service areas were aggregated into 306 hospital referral regions; this Blog reports on patterns of care in these hospital service areas (HSA) and hospital referral regions (HRR).