In 2005 Medicare paid over $1.4 billion for anesthesia services (AS). These services are provided by anesthesia practitioners (AP), such as anesthesiologists and certified registered nurse anesthetists. A study found that Medicare payments for AS are lower than private payments. This difference may create regional discrepancies in the supply of AP. This report examines: the extent to which Medicare payments for AS were lower than private payments across Medicare payment localities; whether the supply of AP across Medicare payment localities was related to the differences between Medicare and private payments for AS or the concentration of Medicare beneficiaries; and compensation levels for AP in 2005 and trends in graduate training. Charts.