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The advent of Diagnostic Related Groupings (DRGs) has brought significant changes to the way hospitals do business. In this environment, Clinical Engineering (CE) departments can play a significant role by identifying areas in which their expertise can be utilized to control costs and increase reliability of medical instrumentation and systems. First, CE departments must examine the impact of technology and the costs of technology on the health care environment. Second, they must examine the CE services provided and their appropriateness to the present needs of the hospital. Third, they must identify the costs and savings associated with providing these services. If CE Departments are able to show that they are an asset rather than just an overhead expense, such cost-effective departments will have an expanding role in today's hospitals.