This paper argues that some sort of utility analysis must be applied for managers to modify laboratory testing services, e.g., volume, precision, timeliness, in the direction of necessarily improved patient services. A familiar laboratory performance measure, diagnostic efficiency, applied without utility analysis can be misleading and can lead to decision criteria that do more harm than good. The method used to demonstrate this contention is a case-specific theoretical analysis, and empirical verification would be needed before using these results in any actual patient care situations. However, this paper suggests that managers need to better understand and quantify the benefits of clinical laboratory testing if they are to protect the beneficial services they provide from the emerging cost consciousness in the medical services industry. This paper illustrates how the long established concept of the clinical utility of laboratory information can be applied.