By relating health care resources and their use to health outcomes, through a coherent macro resource allocation framework, one can examine the health care system for allocative efficiencies. In this article, costs and outcomes are analyzed in such a framework, scenarios for optimizing the use of health care resources—while still maintaining existing health outcomes—are explored, and the implications for ambulatory care are discussed. The research clearly shows that much can be done to make health care systems more efficient without jeopardizing health outcomes.