OBJECTIVES: The aim of this study was to examine the impact of the multi-hundred million dollar investment by the federal government in the developing Patient Outcomes Research Teams (PORTs) in over a dozen major academic medical centers in the United States throughout the 1990s. The objective of the PORTs was to reduce unnecessary clinical variation in medical treatment. METHODS: Using an economic derivation of welfare loss attributable to medical practice variation and hospital admission claims data for 2 million elderly patients generalizable to the nation, we estimate the change in welfare between 1991 and 2000, the period within which the PORTs were designed and executed and their results disseminated. RESULTS: Our results show inpatient admission types targeted by the PORTs did have less welfare loss relative to their total expenditure by 2000, but that there was not a net decrease in the welfare loss for all hospital admissions affected by the PORT. CONCLUSIONS: We conclude that PORTs may have had favorable effects on welfare, most likely by reducing variation in clinical care, but that causality cannot be proved, and the effects were not equal across all conditions targeted by PORTs. This research provides a methodological template that may be used to evaluate the impact of patient safety research on welfare loss and on variation in medical treatment in both hospital and ambulatory settings.