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

Global limits have been suggested as a means of curbing growth in health expenditures 1 . Medicare's recent physician-payment reform incorporates this idea in its volume-performance standard 2 . The volume-performance standard is intended to give physicians incentives to control the volume of their services by linking their future fees to growth in volume. If physicians' services grow too rapidly, the allowed increases in Medicare fees will be adjusted downward. Although this national standard addresses the rapid growth in payments for physicians' services, it fails to address the existing variation in services among geographic areas. Two decades of research have documented persistent . . .