Health drain: the effect of internal migration on regional disparities in healthcare costs

Internal migration can increase regional disparities in healthcare costs between economically disadvantaged and more prosperous regions in the same country. Persons who move to more prosperous regions tend to be young and healthy while persons who move to or remain in economically disadvantaged regions are on average older and sicker. In this study, we propose a novel framework that allows estimating the effect of internal migration and resulting changes in population composition on average healthcare costs in different regions. Our framework refines a "move people back" approach by adjusting for place effects. Based on data for the entire population of the Netherlands, we show that internal migration during the 1998-2018 period increased average healthcare costs in economically disadvantaged provinces by up to 3.4%, and it explains 29.3% of regional variation in healthcare costs.