Ischemic foot ulceration in the diabetic patient is a source of great physical and emotional strain for the patient and represents a significant financial burden for the health care system responsible for the cost of such care. Limb salvage remains the primary therapeutic goal; yet, fiscal constraints imposed by diagnosis related group-based reimbursement systems require maximal cost efficiency in the care process. Between 1984 and 1990, the changes in our team management approach to this problem, emphasizing aggressive surgical revascularization of threatened limbs, have improved the quality of care and dramatically reduced the major and minor amputation rate. In the process, we have reduced the length of hospital stay and the overall cost of care. Despite this improvement in outcome and efficiency, Medicare reimbursement remains insufficient, with an average loss of $7480 per admission.