BACKGROUND:Although disease management programs are widely implemented, little is known about their effectiveness. OBJECTIVE:To determine whether disease management by physician groups is associated with diabetes care processes, control of intermediate outcomes, or the amount of medication used when intermediate outcomes are above target levels. DESIGN:Cross-sectional study. SETTING:Patients were randomly sampled from 63 physician groups nested in 7 health plans sponsored by Translating Research into Action for Diabetes (87%) and from 4 health plans with individual physician contracts (13%). PATIENTS:8661 adults with diabetes who completed a survey (2000-2001) and had medical record data. MEASUREMENTS:Physician group and health plan directors described their organizations' use of physician reminders, performance feedback, and structured care management on a survey; their responses were used to determine measures of intensity of disease management. The current study measured 8 processes of care, including most recent hemoglobin A1c level, systolic blood pressure, serum low-density lipoprotein cholesterol level, and several measures of medication use. RESULTS:Increased use of any of 3 disease management strategies was significantly associated with higher adjusted rates of retinal screening, nephropathy screening, foot examinations, and measurement of hemoglobin A1c levels. Serum lipid level testing and influenza vaccine administration were associated with greater use of structured care management and performance feedback. Greater use of performance feedback correlated with an increased rate of foot examinations (difference, 5 percentage points [95% CI, 1 to 8 percentage points]), and greater use of physician reminders was associated with an increased rate of nephropathy screening (difference, 15 percentage points [CI, 6 to 23 percentage points]). No strategies were associated with intermediate outcome levels or level of medication management. LIMITATIONS:Physician groups were not randomly sampled from population-based listings, and disease management strategies were not randomly allocated across groups. CONCLUSIONS:Disease management strategies were associated with better processes of diabetes care but not with improved intermediate outcomes or level of medication management. A greater focus on direct measurement, feedback, and reporting of intermediate outcome levels or of level of medication management may enhance the effectiveness of these programs.