This paper provides an overview of how one pharmacy benefits manager, Med-Impact Pharmaceutical Management, Inc. (San Diego, California), approaches its disease management (DM) program for asthma. This group's experience with DM counters the common but fallacious belief that reduction of component costs leads to reduction of total expenditures. In fact, greater expenditures on certain components (in particular, drug therapies and preventive and follow-up visits to physicians) can result in greatly reduced overall expenditures by reducing hospitalizations and emergency department treatments for asthmatic patients. The program addresses four essential components of DM: physician intervention, patient empowerment. health risk management, and pharmaceutical care. For each of these areas, careful statistical analysis, effective education, and integrated management can help improve patient care while reducing overall costs.