This study compares the use of health care services (hospital and ambulatory) by patients with rheumatoid arthritis who were under the care of rheumatologists in prepaid and fee-for-service arrangements. Participating physicians from a random sample of half the rheumatologists in northern California maintained a log of all their patients with well-established diagnoses of rheumatoid arthritis. We interviewed 822 of their patients, using a structured, validated phone survey to obtain information about health care use. Patients in prepaid plans had about the same number and type of hospitalizations and the same rate of surgery as those receiving fee-for-service care. However, fee-for-service patients made more ambulatory visits. We conclude that the use of expensive services (hospital admissions and surgery) for the care of patients with rheumatoid arthritis is not different in fee-for-service and prepaid settings.