This article describes how managers of outpatient diagnostic radiology services can develop a competitive advantage by increasing the value of services to patients and referring physicians. A method is presented to identify changes to services that increase their value. The method requires the definition of the "value chains" of patients and referring physicians. Particular attention is paid to the use of information systems technology to suggest and implement service changes. A narrow range of health services was selected because the approach requires a detailed understanding of consumers and how they use services. The approach should, however, be examined carefully by managers seeking to develop a competitive advantage for a wide range of health services.