The Substance of Style: a Study of Small Area Variations in the Practice Styles of Ob/gyn Specialists

We propose several new statistical methods for assessing the presence and sources of small area variations in physician practice. Applying these methods to the choice of caesarian versus vaginal delivery in Florida, we show that half of the observed variation in regional practice is a statistical artifact resulting from variation in individual physician practice styles. The remaining half is due largely to variation in practice styles across hospitals. We further show that hospital-level variation results from physician sorting, as “doctors of a feather” practice together, which in turn stems from variations in medical training. Patient selection of physicians also contributes to observed variations. ∗ Kellogg School of Management, Northwestern University ** UCLA Anderson School of Management ¶ Stanford University Graduate School of Business