The author assessed the effects on quality and continuity of care at a Veterans Affairs hospital as a result of its conversion to an interdisciplinary firm system. Before the firm system was implemented, ambulatory care at the hospital was provided in two medicine clinic areas and in one unscheduled "walk-in" clinic. Care for intercurrent illnesses was frequently not coordinated. The staff from eight clinical services were involved in restructuring into three, interdisciplinary firm teams. These firm teams were created without the addition of new staff. Quality was defined by patient satisfaction, staff satisfaction, re-admissions within 10 days of a hospital discharge, and length of visit. Continuity was defined by percentage of visits to the primary care team (defined as the physician or the physician paired with midlevel practitioner if applicable). Patient satisfaction increased from 4.43 to 4.84 (5-point Likert scale, P < .001). Staff satisfaction increased from 4.3 to 6.24 (7-point Likert scale, P < .001). Re-admissions within 10 days of hospital discharge decreased by 28% (P < .01). Length of visit decreased by 9.5% (P < .0001). Continuity improved from 47% to 69% of visits to the primary care team (P < .002). These results more than justified the staff time needed to convert to a firm system.