Reimbursement policies for health care services are greatly diminishing in the U.S. and Western Europe. Hence, there is an increasing need for doctors and other care givers to reduce costs without compromising the quality of the care being delivered. The clinical laboratory is viewed as an area of high costs where significant reductions have been targeted. Efficient utilization of laboratory services can be achieved by elimination of the general health panel, removal of old tests or those that provide redundant information, a reduction in the use of standing orders, more judicious use of drug assays, acceptance of clinical practice guidelines, and use of reflex testing algorithms. New technologies such as DNA probes can substantially improve diagnostic efficiency. Point-of-care testing devices which have higher costs than incremental central laboratory expenses should only be used if they reduce overall operating expenses. Implementation of expert systems can make remaining tests more effective. Doctors and laboratorians must collaborate to achieve more efficient utilization practices.