When tertiary health centers face capacity constraint, one feasible strategy to meet service demand is outsourcing clinical services to qualified community providers. Clinical outsourcing enables tertiary health centers to meet the expectations of service timeliness and provides good opportunities to collaborate with other health care providers. However, outsourcing may result in dependence and loss of control for the tertiary health centers. Other parties involved in clinical outsourcing such as local partners, patients, and payers may also encounter potential risks as well as enjoy benefits in an outsourcing arrangement. Recommendations on selecting potential outsourcing partners are given to minimize the risks associated with an outsourcing contract. Copyright (c) 2006 John Wiley & Sons, Ltd.