There is a relationship between morbidity/mortal ity and volume, between cost and volume and between excess surgical capacity and medically inappropriate procedures. The study reviews insurance claims data for three procedures: cataract surgery, lumbar lami notomy, and coronary artery bypass surgery. Chang ing the facility from hospital to office can produce substantial savings in cataract surgery. The specialist microneurosurgeon performs lumbar laminotomies more cost-efficiently than either the general neuro surgeon or the orthopedist. Coronary artery surgery is performed more cost-efficiently in regional cen ters. The lengths of hospital stay were considerably shorter in the lumbar laminotomy cases performed by a microneurosurgeon and for the coronary artery bypass graft procedures performed in a regional cen ter. The indication of this study is to question when these types of data can and should be used to channel patients to the more cost-efficient or higher quality provider.