The authors examine trends over 1997-2001 in racial or ethnic disparities in the utilization of three costly, referral-sensitive procedures among the elderly-coronary artery bypass grafting (CABG), percutaneous transluminal coronary angioplasty (PTCA), and hip/joint replacement. Using a multivariate framework, they undertake a simultaneous examination of the relationships between patient, local area context, and health systems on these admission types after comparing them to a control group. This period spans the implementation of the Balanced Budget Act and a major Department of Health and Human Services initiative to reduce disparities in cardiovascular and other diseases. Findings suggest increasing disparities for African Americans relative to Whites in their lower utilization of CABG and PTCA over time, and increasing disparities in the utilization of hip/joint replacement among other races' relative to Whites. The authors find that racial or ethnic disparities in use of referral-sensitive procedures did not narrow over 1997-2001.