The dual interests of improving continuity and efficiency have made the American health care system increasingly reliant on the outpatient setting. The prevailing care model for this setting has been the face- to-face visit. Provider contact using the telephone, however, serves as a potential alternative. The results from the only study of provider- initiated telephone care demonstrated that cost savings would easily offset the costs of its use: compared to usual care, telephone care total expenditures for medical care were 28% less. Furthermore, the 500 men who participated in the study were pleased with telephone care and the sickest appeared to experience improved outcomes as a result of its implementation. If the benefits of telephone care are replicated in clinical settings having both male and female patients, this delivery model should enjoy widespread appeal to patients, providers and payors. Therefore, we propose to conduct a multisite randomized trial in 12 primary care practices to compare routine face-to-face clinic visits with reduced visit frequency augmented with clinician-initiated telephone contact in Medicare patients. The office settings will be in Northern New England, Southeast Florida and the Denver area. Patients enrolled in this randomized controlled trial will be followed for two years. Randomization will occur at the level of the patient. Therefore, the patient will be the unit of analysis. Primary outcome variable will be utilization and costs of care and functional health status. Secondary outcome variables include patient mortality and satisfaction, physician actions, and physician acceptance of telephone care. Provider-initiated telephone care focuses on chronically ill, functionally-limited elderly patients. This represents a large population of heavy service utilizing Medicare patients. Its potential impact, given such a broad target population, is enormous.