Two key ideas in the practice of continuous quality improvement (CQI) in health care are knowledge for improvement as distinguished from professional knowledge in improving the end results of patient care and the failure of the bad apple theory to explain variation in outcomes. As part of their eight-week primary care clerkship, medical students at Case Western Reserve University (Cleveland, Ohio) are assigned to more than 20 sites in the greater Cleveland area where they observe and report on the cost and outcome of care for a patient with asthma. (An earlier article presented run charts and fishbone diagrams based on these reports.) In continuing this project, as described in this article, students report on the frequency of causes of variation in costs and outcomes of care. Students are asked to cite the one factor they believe had the most important effect on the cost and clinical outcome of the asthma patient they studied. For cost variation ranked by frequency, disease severity and site of care are reported most frequently, each accounting for 18% of responses. The most frequently reported cause of outcome variation was disease severity. No correlation was found between cost and outcome; higher costs do not produce healthier patients nor are they associated with greater outcome severity. For the nine most frequently used sites of care, the one-way analysis of means for costs shows that average costs for eight of nine sites are well within the expected range. Only one site (G) falls outside the upper boundary. Bringing this one "bad apple" site into conformity would have very little effect on overall costs. The one-way analysis of standard deviations shows that there may be only one case in the site that explains the bad apple outlier. Although more than one half of the causes of asthma variation reported in this study fall outside traditional professional knowledge, most of the content of health professions education still falls within the professional realm. Real improvement will require combining traditional professional knowledge with knowledge for improvement.