Objectives: Health information technology, especially electronic health records (EHRs), can be used to improve the efficiency and effectiveness of healthcare providers. This study assessed the cost-savings of incorporating a list of preferred specialty care providers into the EHRs used by all primary care physicians (PCPs), accompanied by a comprehensive implementation plan. Methods: On January 1, 2005, all specialty clinic providers at the Israeli Defense Forces were divided into one of four financial classes based on their charges, class 1, the least expensive, being the most preferred, followed by classes 2-4. This list was incorporated into the EHRs used by all PCPs in primary care clinics. PCPs received comprehensive training. Target referral goals were determined for each class and measured for 4 years, together with the total cost of all specialist visits in the first year compared to the following years. Quality assessment (QA) scores were used as a measure of the program's effect on the quality of patient care. Results: During 2005-2008, a marginally significant decline in referrals to class 1 was observed (r=-0.254, p=0.078), however a significant increase in referral rates to class 2 was observed (r=0.957, p=0.042), concurrent with a decrease in referral rates to classes 3 and 4 (r=-0.312, p=0.024). An inverse correlation was observed between year and total costs for all visits to specialists (2008 prices; r=-0.96, p=0.04), and between the mean cost of one specialist visit over the 4 years, indicating a significant reduction in real costs (2008 prices; r=-0.995, p=0.005). QA was not affected by these changes (r=0.94, p=0.016). Conclusions: From a policy perspective, our data suggest that EHR can facilitate effective utilization of healthcare providers and decrease costs.