To address the question, Do laboratory tests cost money or save money? we have used as a model for discussion a common chronic disease, diabetes mellitus, and a widely used laboratory test, that for glycohemoglobin, a measure of long-term glycemia used to manage diabetic patients. Diabetes mellitus is serious, highly prevalent, and costly. In 1992, $1 of every $7 spent on health in the US was for diabetes, predominantly for treatment of the chronic complications of the disease. The recently completed Diabetes Control and Complications Trial (DCCT) demonstrated that development and progression of the chronic complications of diabetes are related to the degree of altered glycemia as quantified by determinations of glycohemoglobin. Thus, use of glycohemoglobin testing for routine diabetes care provides an objective measure of a patient's risk for developing diabetic complications. Results of this test can alert patients and health providers to the need for change in the treatment plan. Optimal use of glycohemoglobin testing for diabetes care will require standardization of test results.