OBJECTIVES: Optometric services are not publicly funded in Prince Edward Island (PEI). This analysis aimed to assess the cost-effectiveness of funding optometrists for diabetic eye care versus funding general practitioners (GPs) for such services in PEI using PEI government’s healthcare payer perspective. METHODS: A Markov cohort model of diabetic retinopathy (DR) was developed using PEI disease data (diabetic incidence, DR incidence and mortality), PEI cost data, and the data from the literature (utilities, DR progression).  In the base-case, biannual screening of DR was assumed. A hypothetical cohort of diabetic patients of 35 years and older in PEI (8,392) was simulated to estimate expected lifetime health outcomes (non-proliferative cases, proliferative cases, mortality, quality-adjusted life years (QALYs)) and cost (screening cost, treatment of proliferation retinopathy). Primary outcomes were expected QALYs, cost and incremental cost per QALY gained. Sensitivity analyses were conducted to examine the robustness of the results. QALYs and costs were discounted at 5%. RESULTS: In the base-case, biannual screening and treatment of DR by optometrists was determined as a cost-saving strategy compared to GP delivered service. The model was most sensitive to the health utility of diabetic patients, and screening rates provided by GPs. Varying the discount rate from 0 to 5% had the least impact on the cost-effectiveness of screening results. In other screening scenarios (annual and biennial), services provided by optometrists appeared to be very cost-effective, or even cost-savings compared to services delivered by GPs. The estimated potential financial savings to PEI government could be between Canadian dollar (C$) 45,000 to C$390,000 during 1 year to 10-year horizon if optometric services were publicly funded. CONCLUSIONS: Publicly funded screening and treatment of DR by optometrists in PEI is potentially a cost-saving strategy compared to the usual care provided by GPs.