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To compare two methods of teaching physical assessment, a traditional faculty-taught course and a course with components taught by specially trained standardized patients (SPs), with respect to students' performances and costs.Medical students in their second year and without preliminary course work in physical assessment were taught by faculty-led small groups. Students in their first year were taught by faculty-led lecture—demonstrations and exercises led by physical examination teaching associates (PETAs). Both groups of students were tested with a performance-based examination that involved six identical stations. The costs of both courses were calculated using faculty and SP salaries.There was no difference in students' performances on two of the stations, those involving the eye and abdominal examinations. The class that had been taught by PETAs, however, demonstrated a statistically significant performance advantage on the remaining four stations. The cost saving from using the PETAs was conservatively estimated at $24,155.Specially trained SPs can effectively teach the normal physical examination to medical students and are a less expensive alternative to traditional faculty small-group teaching methods.