The problem-oriented system provides a unique management tool for medical practice. It follows basic management principles for any complex human endeavor (ie, define goals, set standards, audit performance to those standards, and assess results). The basic tool is the problem-oriented record, which demands that statements of medical action be explicit to permit audit. This concept can be extended to provide and assess care for an entire practice. Five years of cumulative data were assessed. The following changes were noted: (1) The ratio of patients to physicians doubled. (2) The total hospitalization rate fell by more than 20% and general medical portion by 60%. (3) Ambulatory use and cost decreased by approximately 20%. (4) Expenditures for services fell by 22%, while national expenditures for physician services increased by 28%.