Clinical decision making refers to any act of diagnosis that leads to a decision regarding prognosis, treatment, referral or counseling. It has long been recognized that diagnostic probabilities influence perceptions and judgements in medical practice. However, so do ethical values affect clinical judgements, even if these lead to adverse consequences: for example, to judge a well person sick is considered "more ethical" than to judge a sick person well. This dilemma confronts us also when having to choose between what are called Type 1 and Type 2 errors, and the consequences of either may be serious. Other factors that should be taken into account, as they can affect the "pretest likelihood" or "prior probability" of disease and the error rates obtained, include the individual circumstances of the patient (e.g. socioeconomic background), the organizational setting (e.g. patient volume, cultural practices and norms), and system differences (e.g. fee for service versus salaried service). In Part II of this two-part series,we explore in greater depth the mathematical basis for why various diagnostic procedures perform differently in different settings.