Following an era of "do more, earn more," the health-care industry, including physicians and hospitals, has been faced with cost-containment measures. With this in mind, the Detroit Medical Center (DMC) embarked on a laboratory consolidation initiative to achieve this objective in 1985. The DMC entered into a partnership with Damon Clinical Laboratories, forming Damon Clinical Laboratories at the Detroit Medical Center. This partnership resulted in the consolidation of laboratory services within the DMC and the establishment of an outreach activity. In December 1992, it was decided that the partnership would be dissolved, with the DMC assuming full ownership and responsibility for the management of laboratory services. Thus, DMC University Laboratories was created and is currently in its third year of operation. This article presents how the decision to consolidate laboratory services within the DMC was made, along with the process and outcomes of consolidating the operations of seven hospital laboratories.