Diabetic retinopathy is a leading cause of blindness among working age Americans. The epidemiology of diabetic eye disease has been well described in population-based studies and the effects of laser treatment have been tested in randomized controlled trials. The authors have designed a computer simulation model using the published reports of these studies to predict the medical and economic effects of applying currently accepted methods for the control of diabetic retinopathy to the population of type I diabetics. Recommendations for screening are taken from the Public Health Committee of the American Academy of Ophthalmology. Treatment recommendations and treatment efficacy are drawn from the reports of the Diabetic Retinopathy Study (DRS) and the Early Treatment Diabetic Retinopathy Study (ETDRS). Costs of screening and treatment are drawn from published Medicare reimbursement data. Over a 60-year period, the model predicts that proliferative diabetic retinopathy (PDR) requiring panretinal photocoagulation (PRP) will eventually develop in 72% of type I diabetics and macular edema will develop in 42%. If these treatments are delivered as recommended in the clinical trials, the model predicts a cost of $966 per person-year of vision saved from proliferative retinopathy and $1118 per person-year of central acuity saved from macular edema. This is only one seventh of the $6900 average cost of 1 year of Social Security Disability for those disabled by vision loss. Therefore, this model supports the use of federally funded eye care to prevent blindness in medically uninsured diabetics.