Premature morbidity and mortality from chronic diseases account for a major proportion of expenditures for health care cost in the United States. The purpose of this study was to measure the effects of a disease management program on physiological and behavioral health indicators for Medicaid patients in Florida. A two-year prospective study of 15,275 patients with one or more chronic illnesses (congestive heart failure, hypertension, diabetes, or asthma) was undertaken. Control of hypertension improved from baseline to Year 1 (adjusted odds ratio = 1.60, p less than 0.05), with maintenance at Year 2. Adjusted cholesterol declined by 6.41 mg/dl from baseline to Year 1 and by 12.41 mg/dl (p less than 0.01) from baseline to Year 2. Adjusted average medication compliance increased by 0.19 points (p less than 0.01) in Year 1 and 0.29 points (p less than 0.01) in Year 2. Patients in the disease management program benefited in terms of controlling hypertension, asthma symptoms, and cholesterol and blood glucose levels. (Contains 3 tables.)