The oversight of medical care, in the form of peer review, has traditionally been used to ensure that the highest standards of care are maintained.What is relatively new is the external oversight of medical practice carried out by a growing number of independent entities (government, third-party payers, for-profit firms, for example), overseeing care in uncoordinated ways. Tensions arise when reviews of utilization and reviews of quality are conducted by different organizations with conflicting goals. The review instruments are still crude and have neither been adequately tested nor validated. Future attention to developing reliable and valid measures of efficiency and quality is essential. Evidence suggests that the principal process of review, the case-by-case review, may not be cost-effective and may not be conducive to improving quality. It should be replaced by profiles of practice patterns at institutional, regional, or national levels. We propose a model of oversight that emphasizes the appropriate balance between internal mechanisms of quality improvement and external accountability. In this model, internal and external reviews have specific, complementary roles that promote efficiency and quality. Detailed monitoring of quality and problem solving are left to providers who are intimately involved with care. In return, they become accountable to payers and the public through the surveillance of patterns of practice.