Purpose: Few studies have addressed the effects of caregiver interventions on the costs of care for the care recipient. This study evaluated the effects of a caregiver education and support group delivered via the telephone on care recipient health care utilization and cost. Design and Methods: The Telehealth Education Program (TEP) is a manualized program of education and support designed for caregivers of veterans with moderate-to-severe dementia. One hundred fifty-eight spousal caregivers were randomly assigned to either the ten 1-hr sessions of TEP or the usual care (UC). Health care utilization and cost data were extracted from veterans Information System Technology Architecture databases and included outpatient, inpatient, and nursing home data within the VA. Results: Total health care cost data showed a significant (p = 0.039) average cost savings of $2,768 per patient at 6 months for TEP as compared with UC, but these were not maintained at 1 year. All costs included in the total costs measure contributed to this difference. Inpatient, outpatient, and nursing home costs were all assessed separately, but only nursing home costs reached significance (p = 0.009), with a savings of $1,057 per patient at 6 months. Implications: The TEP caregiver intervention resulted in short-term cost savings for veteran care recipients. Future studies of caregiver interventions should examine their effects on costs of care for the care recipients in addition to their effects on caregiver outcomes.