The Board of Directors of the American Diabetes Association (ADA) recently endorsed a resolution recommending third-party payment for outpatient education and nutritional counseling. One of the major rationales for the statement was that education and nutritional counseling will lead to reductions in health care costs. This article critically reviews the 13 studies cited in support of the ADA Policy Statement. Among these studies, only 2 compared a treated group with a control group. Both of the studies with control groups failed to randomly assign patients to treatment condition. Only 4 of the studies showed an accounting of program costs. Upon close inspection, it appears that some of the programs actually increased, rather than decreased, health care expenditures. Attrition from programs was reported in only a minority of cases, and was large when reported. The effect of the programs upon diabetes control was inconsistent across studies. It is suggested that the rationale for education and nutritional services be based on improved health status. In addition, the execution of a systematic experimental study to evaluate these services is urged.