The authors studied differences in the rate of hospitalization of a random sample of all general and family practitioners in the state of Washington. The study was designed to identify nonmedical factors that affect the rate at which physicians hospitalize ambulatory patients. They found that the hospitalization rate varied greatly among physicians and that this rate appeared to be sensitive to nonmedical factors. The following independent variables were significantly associated with higher rates of hospitalization while controlling for other factors: low hospital occupancy rates, low per capita income in the county, group practice, a broader scope of outpatient practice, and a busier outpatient practice. They conclude that physicians are sensitive to a range of nonmedical factors in their decision to utilize hospital resources. These findings suggest that a substantial proportion of all hospitalizations are discretionary, and that changes in practice organization or hospital occupancy rates will affect the rate of hospital use.