Despite an increasing trend in the use of breast conserving surgery (B CS) to treat early-stage breast cancer (Silliman et al. 1997; Guadagnoli et al. 1998), substantial variability exists in use of BCS among older women (Nattinger et al. 1996; Wennberg and Cooper, 1996), with the oldest women receiving less BCS, and when treated by BCS, receiving radiotherapy less often than others (Mandelblatt et al. 2000; Busch et al. 1996; Bahlard-Barbash et al. 1996). Numerous studies have examined the roles of factors such as underlying health (Silliman et al. 1997; Albain et al. 1996), age, or socioeconomic biases (Lazovich et al. 1991; Albain et al. 1996; Michalski and Nattinger 1997), physicians' attitudes toward treatment, and patient involvement in treatment decisions (Silliman et al. 1989; Liberati et a). 1987; Liberati et al. 1991), geographic variations or barriers in access to services (Farrow, Hunt, and Samet 1992; Nattinger et al. 1992; Nattinger et al. 1996; Albain et al. 1996; Osteen et al. 1994; Hand et al . 1991), and different care delivery systems (Riley et al. 1999; Potosky et al. 1997).

Only one study (Hadiley, Mitchell, and Mandelblatt 2001) has investigated whether variations in Medicare's fees for BCS and mastectomy (MST) influence the surgical treatment received by elderly Medicare beneficiaries who had breast surgery. Analyzing small-area data on the percentage of elderly Medicare breast surgery patients receiving BCS in 1994, that study found that a 10 percent higher fee for BCS was associated with a 7-10 percent increase in the percentage of beneficiaries receiving BOS in an area, while a 10 percent lower MST fee increased the BCS percentage by 2-3 percent. While suggestive of a fee effect, these findings may have been influenced by several potential limitations. The results may reflect an ecological fallacy because the analysis was conducted at the area level--the same results may not hold for individual patients. The Medicare claims data used in the analysis were not limited to confirmed cases of newly diagnosed localized breast cancer. Thus, it was not possible to exclude cases wh ere minimally invasive surgery was used to rule out a cancer diagnosis from those where the procedure was used as a treatment. Nor was it possible to distinguish women who received breast conserving surgery only (BCSO) from those who received breast conserving surgery plus radiation therapy (BCSRT). If there are differences in the factors that determine the receipt of either of these treatments relative to mastectomy, then the inability to distinguish between them may have biased the earlier result. In particular, it is not clear that the potential effects of the MST and BCS fees should be the same in considering these two treatments relative to mastectomy.