Both models indicate that the number of general practitioners has the largest
proportionate effect on costs. This is plausible since the remuneration system for
GPs is much more complicated than for other practitioners. Density of population
is significantly positively associated with administrative costs in the random
effects model. Since the variable shows relatively little change over time it may be
picking up area effects. One possibility is that more densely populated areas have
greater turnover of patients on GP lists and so generate more administration. The
regional dummies are also of the expected sign, indicating that Inner London areas
have significantly higher administrative costs than more rural areas and also than
other urban areas, probably because of differences in property rents.