There is a prevailing consensus that the quality of health services can be improved by concentrating care in the hands of those providers who carry out larger volumes of activity. The substantial research literature indicates a positive volume-quality relationship. However, these conclusions are largely based on observational studies using administrative databases which are poorly adjusted for case mix. Better control for confounding shows that volume-quality effects in several cases may be an artefact. The research is also difficult to interpret because of the limited measurement of outcomes, poor analysis of the relative contributions of the clinician and the hospital levels, and the lack of clarity about the direction of cause and effect. Most research is insufficiently reliable to inform policy on the use of volume for credentialling or for the re-configuration of services.