The researchers examined key physician practice and market characteristics that may contribute to high costs and inefficient care in the Medicare program. The study was composed of three phases. In phase one, they analyzed the treatment of high-cost Medicare beneficiaries in order to identify key physician, practice, and market characteristics associated with differences between actual and predicted Medicare payments and medical care use. In phase two, they examined whether the factors associated with greater than predicted resource use affect high-cost beneficiaries’ health outcomes. Finally, the researchers examined possible sources of geographic cost variations for high-cost beneficiaries and the extent to which these variations reflect differences in patient characteristics or supply-related factors and practice patterns of providers in a particular region. The objective of this project was to identify potential policy levers that can influence cost effectiveness in the delivery of medical care to high-cost Medicare patients.