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BACKGROUND: Type 2 Diabetes is a main concern of publichealth in contemporary world with remarkable mortality, delayedcomplications and health costs. Governments are obliged toimprove the quality of health care and consider appropriatestrategies to reduce the costs. An alternative strategy for hospitalservices is care at home. Therefore, this study was aimed toevaluate the cost-effectiveness of home-based and hospital-baseddiabetes care.METHODS: A quasi-experimental, pre-test and post-test designwas conducted in Northwest Iran. Sixty subjects who were eligibleinsulin-treatment type 2 diabetes mellitus were randomly assignedinto two equal groups to receive home-based or conventionalhospital-based care. Data on glycosylated hemoglobin (HbA1c),hypoglycemia episodes, time needed to achieve glycemic controllevel, diabetes treatment satisfaction, diabetes knowledge and costsduring three months were collected.RESULTS: The cost of home-based care in insulin therapydiabetes was 61% less compared with the hospital-based methods.The former strategy was cost-effective in terms of reduction inHbA1C and the time needed to achieve glycemic control. Thepatients in home care group were more satisfied andknowledgeable.CONCLUSIONS: The care at home approach for type 2 diabeticpatients can be introduced and supported as a cost-effective caremethod in the country.