The objectives of this study are to identify whether the small area variation also exists in the oriental medicine and, if it exists, what causes, to expand our boundary of research interests on the small area variation observed at the western medicine toward the oriental medicine as one of the fundamental research foundations and to provide any fundamental findings from this study results to the healthcare politicians to promote consumer's rational behaviors for the use of healthcare. This study analyzed the health insurance claim data (2010, 2011) which were the patients of western medicine and the outpatients of the oriental medicine with the top 10 most frequent diseases and looked into the variation of healthcare utilization among the areas after grouping resident area into an 86-area category. The study result shows that the small area variation was also observed at the part of the oriental medicine in which the characteristics of patients critically affect the healthcare expenditure per visit day rather than those of providers and the characteristics of both patients and providers equally affect the healthcare expenditure per patient. Therefore, this study suggests that government set up healthcare policies on the standardization of oriental medicine to prevent its over-utilization and unmet need, enforcing the roles of oriental medicine in the markets, enhancing the appropriate health care utilization, and expanding provision and sharing the health care information to reduce unnecessary health care utilization.
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