This document reviews the findings of studies of the clinical and economic performance of Ontario’s Health Service Organizations and makes recommendations for further evaluation. The tentative conclusions regarding HSO performance indicate that: 1. The HSO program in total and some HSOs individually have lower rates of hospitalization of their patients. 2. The use of ambulatory care by HSO and FFS patients is about the same. 3. HSO physicians manager greater patient loads. 4. HSOs employ more non-physician health personnel. 5. Some HSOs provide higher quality of care. 6. Some HSOs are better structured to deliver preventive services to their patients. 7. HSO physicians are more likely to believe their method of remuneration favours the delivery of preventive services. 8. HSO patients are less satisfied with their care. These conclusions are tentative because there are several methodological problems with the studies on which they are based: eg. The estimation of the true size of a practice, the self-selection of patients and providers, and the calculation of costs (particularly for hospital care). As well, the existing evaluations involve few centres and there are many differences among the centres. Hence generalizations of the findings to the wider population of providers may be invalid. It appears that although payment mechanisms can affect the cost and quality of health care, the differences within modalities are as great or greater than the differences between modalities. Factors, other than payment mechanism which have been found to affect the quality or cost of health care include: group practice, peer review, other financial incentives, other organizational determinants (eg. Institutional links), the use of non-physician providers, and the provider selection process. An important step in evaluation is to set out the core objectives of the program under evaluation. Primary objects might include shifting physicians to non-FFS practice, reducing hospital utilization, enhancing disease prevention and health promotion activities, promoting better maintenance care for chronic illness, and enhancing the health status of the population. Once the primary objectives are clearly specified measureable targets may be selected. To guide the development of the HSO program it is important to identify other practice features associated with better performance rather than simply study the effects of payment mechanism alone.