Abstract
The cost of ambulatory care, and its apparent great variation across set tings, is becoming increasingly import,ant as expenditures for this care grow. Yet, this aspect of health care is not well understood or well documented. Interest in ambulatory care has grown in light of the following questions: Is too much medical care being provided? Are services badly distributed or provided in the wrong places? Is ambulatory care in certain settings, partic ularly those which are hospital based, too costly? With respect to this last problem, it is often alleged that the cost of providing the same service in a hospital-based setting is many times what such a service costs in a physi cian's office or independent free-standing clinic. Because an increasing pro portion of hospital-based ambulatory care is paid for by government (Medicare/Medicaid), these alleged cost differences have prompted legisla tive proposals to limit payment for hospital-based care. New York State, in fact, currently imposes a ceiling on its Medicaid payment for ambulatory care.