To examine the relationship between physician race and care of racial minority and ethnic minority patients and medically indigent patients. Secondary analysis of data from the 1987 National Medical Expenditure Survey, a cross-sectional survey of Americans designed to provide national estimates of health care utilization and expenditures. A sample representative of the total civilian noninstitutionalized US population with oversampling of minorities and the medically indigent. Survey respondents aged 18 years or older who identified a specific physician as their usual source of care (n = 15,081, corresponding to a national population estimate of 116 million Americans). Identification of a nonwhite physician as usual source of care. Of adult Americans who identified a usual-source-of-care physician, 14.4% identified a nonwhite physician as that source of care. Minority patients were more than four times more likely to receive care from nonwhite physicians than were non-Hispanic white patients. Low-income, Medicaid, and uninsured patients were also more likely to receive care from nonwhite physicians. Individuals who receive care from nonwhite physicians were more likely to report worse health, visit an emergency department, and be hospitalized. Individuals who receive care from nonwhite physicians reported more acute complaints, chronic conditions, functional limitations, and psychological symptoms as well as longer visits. Nonwhite physicians are more likely to care for minority, medically indigent, and sicker patients. Caring for less affluent and sicker patients may financially penalize nonwhite physicians and make them particularly vulnerable to capitation arrangements.