`A New Year and, finally, the truth. Geographic variation is not “unexplained,” as we were led to believe throughout health care reform. It is due to differences in income, poverty, illness, and demographic characteristics. The New York Times has made it official. In its editorial today about the federal government’s decision to allow states to set the standards for health care benefits, it quotes Secretary Sebelius’ earlier statement that such a change is warranted because of “differences among the states in demographics, economics, patterns of illness and the way medicine is practiced” (see Hilly Terrain, below for more). This is a sea change. Acknowledging the fact that geographic variation is not simply about practice variation but, rather, that it also reflects demographic and economic factors may finally allow consideration of the core issues of poverty and income-inequality in the development of coherent health care policy.