Efforts to improve the quality and costs of U.S. health care have focused largely on fostering physician adherence to evidence-based guidelines, ignoring the role of clinical judgment in more discretionary settings. We surveyed primary care physicians to assess variability in discretionary decision making and evaluate its relationship to the cost of health care. Physicians in high-spending regions see patients back more frequently and are more likely to recommend screening tests of unproven benefit and discretionary interventions compared with physicians in low-spending regions; however, both appear equally likely to recommend guideline-supported interventions. Greater attention should be paid to the local factors that influence physicians' clinical judgment in discretionary settings.