Does it Matter How Small Geographic Areas are Constructed? Ward's Algorithm Versus the Plurality Rule

• Published in: Health services and outcomes research methodology 2001-03, Vol.2 (1), p.5
• Main Authors: Shwartz, Michael, Susan M.C. Payne, Restuccia, Joseph D, Ash, Arlene S
• Format: Article
• Language: English
• Subjects: Algorithms; Area planning & development; Health care; Studies
• ISSN: 1387-3741; 1572-9400
• DOI: 10.1023/A:1011463815766

This paper illustrates Ward's clustering algorithm, an approach that creates small geographic areas based on similarity in the pattern of hospital use. It compares areas resulting from Ward's algorithm using all hospital discharges to: 1. areas resulting from the plurality rule, the more widely used approach, and 2. areas resulting from Ward's algorithm using subsets of discharges. Compared to areas from Ward's algorithm, the plurality rule resulted in many more single zip code areas and somewhat more large zip code areas. R2, a measure of within-area variation in the pattern of hospital use, did not differ much by clustering method. When areas from Ward's algorithm were paired with areas from the plurality rule, about 81% of the discharges from Ward's algorithm areas were in the paired plurality rule areas. Though in many cases there were large errors when zip code discharge rates were estimated by area rates, the distribution of errors was similar whether Ward's algorithm or the plurality rule was used to create the areas. When areas from different clustering methods were used in a study to identify those areas with large differences in utilization patterns by payor type, between 70% and 83% of zip codes and discharges were flagged in common. Though for several summary measures there was little difference by clustering method, the actual areas created were different. There is no gold standard to determine which set of areas is best. However, Ward's clustering algorithm has conceptual appeal compared to the more widely used plurality rule.