Geographic Variation in Expenditures for Physicians' Services in the United States

Background The national volume-performance standard recently implemented by Medicare does not account for geographic variation in expenditures for physicians' services. To study this variation, we examined expenditures for physicians' services in all metropolitan areas in the United States. Methods We used Medicare claims data for 1989 to measure rates of service use for beneficiaries living in the 317 U.S. metropolitan statistical areas (MSAs). The variables investigated were rates of admission to the hospital, payments to physicians for inpatient care per admission and per beneficiary, payments to physicians for outpatient care per beneficiary, and overall payments to physicians per beneficiary. Expenditures were measured in terms of allowed charges as adjusted to reflect prevailing charges in each MSA. Rates of use were adjusted for age and sex, with the exception of the variable for payments to physicians for inpatient care per admission, which was adjusted for case mix. Results Expenditures for the d...