If clinical quality assurance and cost-effectiveness of diagnostic testing are to be measured, some sort of measurement of the clinical value of a test result is needed. The predictive value of a test result is not a real measure of its clinical value, and, particularly, when used in the later stages of a diagnostic workup, it can be misleading. Using the same data that go into a calculation of predictive value, the clinical value can be determined according to the amount of useful information that is provided by a test result. Cost-effectiveness can be expressed as dollars per bit of diagnostic information.