Objectives. Review and analyze various approaches to performance measu
rement in health care, demonstrating the value of provider-initiated p
erformance measurement in which ongoing monitoring of both processes a
nd outcomes of care coupled with the use of clinical guidelines enhanc
es performance improvement efforts. Describe some of the issues and fi
ndings associated with the use of such a methodology in prostate cance
r care. Methods. Literature review and case study. Results. There are
a number of significant limitations in the use of a ''report card'' me
thodology to improve quality and efficiency in health care. The comple
mentary approach of combining ''instrument panels'' and clinical guide
lines within an overall continuous quality improvement framework appea
rs to have resulted in improved clinical outomes and reduced costs in
a six-physician urology group located in a heavily managed-care penetr
ated market. Conclusions. Performance measurement tools are integral t
o efforts to improve outcomes and efficiency in health care. Providers
of care might consider adapting the kind of performance improvement m
ethodology described in this article. Practice benefits including impr
oved clinical and economic outcomes are likely to follow.