Admission records at Children's Hospital Medical Center in Cincinnati were reviewed to determine the impact of a comprehensive diabetes management program on selected indicators of health status in children with diabetes mellitus. Two periods were compared: January 1973 through June 1978 (period A), prior to institution of the program, and July 1978 through December 1987 (period B). Although the number of children admitted with a diagnosis of type I diabetes not associated with DKA or other diagnoses increased by 10% during these 10 years, the number of children with diabetic ketoacidosis (DKA) not associated with other diagnoses fell from 58% in period A to 24% in period B. Similarly, average length of stay for the reported DKA admissions decreased from a mean of 5.84 days in period A to a mean of 4.62 days in period B. This reduction of 1.2 days saved an estimated $342,000 in hospitalization costs. These findings suggest that a comprehensive diabetes management program consisting of medical treatment, education, and psychological support services, has a positive influence on patient outcome and can be cost effective.