Geographic variation in health services utilization for medical, surgical, and psychiatric conditions may signal problems in quality. We utilized data from a nationally representative survey of alcohol, drug and mental disorders (ADM) and treatment to investigate the extent to which geographic variation in treatment rates for ADM disorders was due to variation in case-mix across sites. The amount of the variation in treatment rates explained by geographic area in unadjusted fixed effects and random intercepts models was statistically significant with R2 statistics ranging from 1% to 2% and intra-cluster correlations (ICCs) ranging from 0.009 to 0.043. Considerably more variation was explained in analyses that adjusted for individuals’ ADM disorders, physical health, and socioeconomic status, with R2 statistics from 10% to 19%. In random intercept models ICCs were decreased 20 to 100% in adjusted models. There may be only modest potential for improving quality by reducing geographic variation.
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