OBJECTIVES: Diabetic nephropathy is a serious and common complication in diabetic patients; however the onset and the course can be favourably influenced by appropriate therapy when detected early. Current recommendations include testing of creatinine based estimation of glomerular filtration rate (eGFR) and for microalbuminuria. Due to substantial limitations of creatinine, cystatin C (cysC) has been proposed as alternative marker for early detection of (chronic kidney disease) CKD. METHODS: We developed a Cost-Utility Model to simulate the long-term consequences and disease progression for diabetic patients using serum cysC instead of Creatinine for monitoring of kidney function. Markov modelling techniques were used to estimate incidence of complications and disease progression, and Monte Carlo simulation accounted for uncertainty. The model includes 11 health states to describe the disease progression and occurrence of adverse events. Probabilities were derived from clinical and epidemiological studies. The cohort definition was adapted from the UKPDS study. Direct medical costs from published sources were used and expressed in 2009 Euro from the payer’s perspective. QALYs and total costs were projected over a life-time horizon and discounted at 5% p.a. RESULTS: Early detection of CKD with cysC leads to lifetime costs of €52,950 and 14.19 QALYs (€3,732 per QALY). Detection with Creatinine amounts to €64,912 and 12.82 QALYs (€5,063 per QALY). Cost saving amounts to €11,962 per patient and a QALY gain of 1.37; these arise due to slower disease progression and reduced complications. The cumulative incidence of complications was estimated to be lower for cysC than Creatinine (-15%). Early detection with cysC leads to a decreased number of patient-years (14%-points) spent in ESRD, due to a later onset. Probabilistic sensitivity analyses demonstrated the robustness of the model. CONCLUSIONS: The economic benefit of using cysC is substantial, due to reduction in complications and disease progression as well as lower long-term costs.