In 1994, we discovered that our hospital was higher than the 75th percentile in the average number of laboratory tests performed per inpatient discharge compared with other teaching hospitals with a case mix index of greater than 1.35. Because of the diversity and volume of tests offered, no single project would have significantly affected the number of tests ordered per patient. Pathologists together with the administrative director and section managers identified areas of potential improvement, noting tests that were high volume, expensive, difficult to perform, or of questionable medical benefit. We relied on a combination of administrative changes and physician education initiatives to influence physician test-ordering behavior. The impact of these initiatives was measured by reviewing monthly revenue and usage reports before and after changes were implemented. Each of these initiatives helped to gradually decrease the average number of inpatient tests per discharge from 44 in the first quarter of 1994 to 29 in the third quarter of 1999. Compared with our peer group, our hospital's rank has steadily improved from the 75th to the 15th percentile.