About 43 million people live in the Republic of South Africa. Approximately 80% of these receive government-sponsored medical care, and 20% receive medical care in the private sector – paid for either by themselves or by medical insurance schemes. The costs of diabetes management are considerable, both for the person with the condition and the health-care provider. These costs relate to the management of the condition and the treatment of short- and long-term diabetes complications. In this article, Larry Distiller reports from South Africa on the successful implementation of a health management programme which provides financial incentives for health-care providers to improve diabetes care.