As a result of a management budgeting exercise, the costs of rheumatology services in two hospitals in the Northern Region have been calculated. These comprehensive and itemized charges were derived by an external group of accountants. The data for a 1-year period from April 1985 are presented. Differences in both mean out-patient-visit and in-patient bed-day charges between hospitals were found. Factors contributing to these differences are discussed. The major costs, particularly of in-patient care, are not directly controllable by the clinician. Mean costs per out-patient visit were 26.00 pounds and 36.90 pounds at the two hospitals. Costs for in-patient care per bed-day were 49.00 pounds and 70.71 pounds, respectively. The calculated total cost of the rheumatology service in Newcastle was approximately 1.00 pound per capita catchment population per annum.