Purpose. The purpose of this study was to examine if physician assessments of their patients’ health status after the medical encounter are comparable to their patients’ self-assessment of their own health. Methods. Consecutive patients with musculoskeletal diseases were recruited when they attended 1 of the rheumatology outpatient clinics selected for the study. Five physicians participated in the study, 4 based at an academic center and 1 in the community. Patients were interviewed after seeing the physician; they completed health status questionnaires (mHAQ and SF-12) and rated their pain, worry about disease, and overall health status on visual analog scales. Standard gamble techniques were used to obtain patient utilities in relation to their health status, “gambling” on the probability of obtaining perfect health from an intervention with varying risks of death. After the medical encounter, physicians were asked to rate their patients’ health status with similar instruments and with standard gamble elicitation techniques, blinded to the patients’ responses. Results. A total of 105 patients participated in the study; 70% were female; mean age was 54 ± 16 years; 64% had a connective tissue disease, most commonly rheumatoid arthritis; and the other diseases in this group included soft tissue rheumatism, osteoarthritis, or low back pain. Statistically significant differences were observed between patient and physician ratings for pain, overall health, and standard gamble. On average, physicians rated their patients’ health status higher than the patients themselves and were less willing to gamble on the risk of death versus perfect health. Intraclass correlation coefficients (ICC) were low: 0.42 for pain, 0.11 for worry, 0.11 for overall health, and 0.04 for standard gamble utilities. Similar findings were observed when subgroup analysis was performed for individual physicians and for patients with connective tissue diseases. No specific patient characteristic consistently related to increased divergence in the ratings. Conclusions. These findings suggest that the communication between physicians and their patients at the time of the medical encounter needs to be enhanced. An understanding of their patients’ health perceptions may assist physicians in suggesting appropriate interventions, taking into account their patients’ benefit-risk preferences.