The aim of this randomized trial o evaluate the quality and cost of health care provided to people with diabetes in a Public Employment-Based Health Insurance program in La Plata, Argentina. Consequently, 1590 diabetic patients were interviewed and the data obtained were analyzed using univariate and multiple logistic regression. Patients treated without insulin (48%) were significantly older and reported obesity, hypertension, and macroangiopathy more frequently than those treated with insulin. Hospitalization rates were significantly higher in insulin-treated patients. These rates were comparable in people without complications or microangiopathy alone, but increased significantly in patients with macroangiopathy. Many recommended practices were not performed during the preceding year: foot exams (20-30%), referral to ophthalmologist (21-29%), and HbA1c test (60-78%). In contrast, the rate of medical testing and visits was high, even in uncomplicated patients, resulting in an estimated cost of the care 22.7% higher than it would have been if the tests and procedures had been performed as recommended by international guidelines. We conclude that the current care for diabetes is inefficient and expensive; the implementation of data-based guidelines would result in a more effective allocation of resources, thus improving the quality of diabetes care and overall quality of life.