This study was conducted to assess the effects of implementation of the patient referral system started July 1st, 1989. A comparison on the pattern of outpatient services of the Departments of Internal Medicine, General Surgery, and Pediatrics at the Yeungnam University Hospital was conducted for each one year period before and after implementation of the patient referral system. The pre-implementation period was from July 1, 1988 to June 30, 1989 and the post-implementation period was from July 1, 1989 to June 30, 1990. The information used for this study was obtained from official forms, prepared by the Yeungnam University Hospital, and submitted to the Korean Medical Insurance Cooperatives. After implementation of the patient referral system, the number of outpatient cases in the Department of Internal Medicine decreased 36.1% from 9,669 cases to 6,181 cases a year. Cases in the Department of General Surgery decreased 23.7% from 1,864 cases to 1,422 cases a year. The number of cases in the Department of Pediatrics decreased 36.9% from 3,372 cases to 2,128 cases a year. After implementation of the patient referral system, the average age of cases in the Departments of Internal Medicine and General Surgery was 52.5 and 49.7 years old, respectively. This was a significant increase in comparison with the pre-implementation period. After implementation of patient referral system, the proportion of new outpatients in the Department of Internal Medicine decreased from 24.1% to 14.6%, the Department of General Surgery from 36.0% to 23.4%, and the Department of Pediatrics from 15.5% to 8.3%. The number of visits per case decreased significantly in the Department of Internal Medicine(from 1.74 to 1.61), but there was no significant change in the Departments of General Surgery and Pediatrics. The length of treatment per case increased significantly in all three departments(from 16.1 days to 19.3 days in the Department of Internal Medicine, from 12.0 days to 15.2 days in the Department General Surgery, and 8.9 days to 11.2 days in the Department of Pediatrics). The number of clinical tests per case increased significantly in the Department of Internal Medicine (from 2.2 to 2.5), in the Department of Pediatrics(from 0.8 to 1.1) and increased in the Department of General Surgery(from 6.4 to 6.6). The average medical cost per case decreased from 43,900 Won to 42,500 Won in the Department of Internal Medicine, while the cost increased from 75,900 Won to 78,500 Won in the Department of General Surgery and from 12,700 Won to 13,500 Won in the Department of Pediatrics. In case-mix, the chronic degenerative disease(i. e. hypertension, diabetes mellitus, angina pectoris, malignant neoplasm, and pulmonary tuberculosis) ranked higher and acute infectious diseases and simple cases(i. e. gastritis and duodenitis, haemorrhoids, anal fissure, carbuncle, acute URI, and bronchitis) ranked lower after implementation of the patient referral system compared to before implementation.