Physicians and their practice patterns are the largest single determinant of the level of aggregate national health care expenditures. Integrated delivery systems (organizations linking a multispecialty physician groups and acute care hospitals) appear to be more efficient than other organizational structures while providing better clinical outcomes. To determine whether a subset of hospitals was more or less efficient than the national average, we relied on data from the Dartmouth Atlas Project, which included data from 4,346 hospitals. The analysis was restricted to patients who had one or more of 12 chronic illnesses associated with a high probability of death, and the number of hospitals identified as our control group was 14, represented by 13 organizations. Based on the preliminary data, physicians operating in a multispecialty group appear to use less physician resources to care for their patients and admit less often to a hospital, thereby reducing health care expenditures. As the federal government seeks to foster more efficient health care delivery and better outcomes, it may look to the physician-led integrated delivery network as an example of an efficient and high quality model.