The entry of third party payors into the field of health care has brought about increasing awareness of cost-effectiveness. Since breast biopsy is among the most commonly performed operations and open to criticism, the purpose of this report is to provide data relative to cost-effectiveness of breast biopsies at the University of New Mexico and to compare such data with 1) cost-effectiveness of mammographic screening for breast cancer, and 2) cost-effectiveness of judicious use of mammography in patients with breast complaints. From 1972 through 1978, 1064 patients were seen because of complaints relative to the breasts and 516 breast biopsies were done. Seventy patients were found to have cancer (14% of the breast biopsies). Using the October 1978 through March 1979 cost schedules for hospital and professional fees, the average cost of a breast biopsy was $1,216.00 for general anesthesia, $751.00 for assisted local anesthesia, and $520.00 for local anesthesia. The major differences lay in 1) anesthesia and operating room average charges of $618.00 for general anesthesia, $451.00 for assisted local anesthesia, and $260.00 for local anesthesia; 2) room charge of $174.00 for general anesthesia; and 3) laboratory and x-ray charges of $256.00 for general anesthesia, $120.00 for assisted local anesthesia, and $91.00 for local anesthesia. In 1978 64% of breast biopsies were done under local anesthesia as opposed to 1972 when 22% were done under local anesthesia. For the 516 breast biopsies, 47% were done under local anesthesia, 4% under assisted local anesthesia and 49% under general anesthesia. The calculated overall cost of the 516 breast biopsies was $448,794.00 or $6411.00 per cancer. Comparing our data to those of Lewis at our 1978-79 cost schedules and assuming our anesthetic mix in his patients, his cost per cancer identified was $3973.00 in patients with breast complaints. His cost figure is considerably lower than ours because of a higher yield of cancer (41%). Making the same assumptions for cost and anesthetic mix, the cost per biopsy proved cancer diagnosed in mammographic screening for breast cancer is $11,175.00 (Feig), and $24,482 (Lewis). Thus, 1) use of local anesthesia rather than general anesthesia reduces cost of breast biopsies by $694.00 per breast biopsy, 2) greater precision in selection of patients for breast biopsies is mandatory to reduce cost of diagnosis of cancer, 3) present state of the surgical art is more cost-effective than is screening for breast cancer.