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In recent years, health plans have turned to disease management programs as a means of reducing inpatient utilization while promoting preventive outpatient services provided for patients with type 2 diabetes mellitus.The purpose of this study was to assess the association between four preventive diabetes screenings (retinal eye exams, glycosylated hemoglobin [HbA1c] testing, lipid testing, and albumin testing) in the base study period, and health services utilization patterns during a 24-month follow-up study period for 2641 patients with type 2 diabetes.Claims data from Regence BlueShield of Idaho for the three periods of 2000 (base period), 2001, and 2002 (results period) have provided the basis for this empirical analysis. Based on our review of the relevant literature and results from disease management and health plan management programs, the central hypothesis of this study was that the four preventive diabetes screenings in the base study period would be associated with lower inpatient utilization and greater preventive outpatient utilization during a 24-month follow-up study period. Simple linear association analysis was used to measure the relationship between the utilization of preventive diabetes screenings and subsequent utilization of emergency room, inpatient, and preventive outpatient services.The study results show that for patients who comply with recommended lipid screening services, health plans can expect to see a significant reduction in the number of inpatient admissions over the subsequent 2 years, while marginal inpatient reductions might be expected following HbA1c testing. Furthermore, for patients who comply with recommended screenings of either retinal eye exams or albumin testing, health plans can expect to see these patients utilizing preventive outpatient services more frequently in the subsequent 2 years.Pursuing a state- or federal-supported screening program for patients with type 2 diabetes could reduce frequent utilization of inpatient services. Furthermore, in support of the goal of disease management programs to reduce inpatient utilization and increase preventive outpatient service utilization among the increasing proportion of members with type 2 diabetes, health plans are encouraged to provide education about and monitor their patients’ compliance with recommended screenings in the future. Further studies should examine the role of lipid testing in reducing the risk of microvascular diseases. Future research should also pursue an understanding of how a reduction in inpatient utilization is associated with an increased emphasis on lipid screening.