The background for this study is derived from our long-standing programs of research on chronic disease self-management and automated telephone disease management (ATDM) as well as the research of others. This research has demonstrated that: 1) Self-management programs and ATDM programs can improve health-related quality of life, metabolic control, and health care utilization. 2) The effects of these programs on health-related quality of life and health care utilization are mediated partially by enhancement of perceived self-efficacy to cope with the consequences of chronic disease. 3) Self-management education has a potential for achieving substantial financial savings through decreased use of inpatient and outpatient health care.