Following the Movers: Quantifying Place-Specific Effects on Swiss Healthcare Spending

We estimate the contribution of place-specific (supply-side) factors to the regional variation in healthcare expenditure in Switzerland using anonymized claims that cover 1.45 million individuals between 2015 and 2023. Exploiting an event-study movers design that follows 144,856 individuals who relocated across 42 health insurance areas, and controlling for individual fixed effects and time-varying covariates, we quantify how much individual health spending adjusts toward the average level of the destination region. We find that roughly half of regional spending differences are attributable to location (place) effects: the pooled place-effect is 0.54 – a move to an area with 10% higher average expenditure is associated with a 5.4% increase in individual spending. The effects of location are concentrated in outpatient services (0.64) and pharmaceuticals (0.50), are small for long-term care (0.18) and are not detectable for hospital spending. The effects are asymmetric: moves to higher-expenditure areas produce sizable upward adjustments (place-effect 0.56), while moves to lower-spending areas show little convergence. We also find evidence for a correlation of supply and demand factors: individuals with higher latent health needs are more likely to reside in higher-supply areas. Although not a definitive proof of supplier-induced demand, the results imply that supply availability and demand-side factors jointly drive substantial regional expenditure variation. Policy implications include the potential for coordinated supply-side planning and insurer-led capacity governance to curb inefficient cost growth.