In order to characterise asthma management in a managed care setting, we identified 10,301 patients who were diagnosed with asthma between 1 January 1988 and 31 December 1991 at a group model health maintenance organisation in central Massachusetts, US. We obtained for these patients automated utilisation files containing data on medications, hospitalisations, emergency room visits, office visits, and estimated costs of these services. The medication dispensed to the greatest proportion of patients was beta 2 agonists either by inhalation (56%) or orally (21%). Theophylline was dispensed to 23% of the patients. Maintenance therapy was inhaled anti-inflammatory medication was uncommon, as inhaled corticosteroids (17%) and sodium cromoglycate (cromolyn sodium) [8%] were dispensed to fewer patients than other asthma medications. Among patients who had been hospitalised in the previous year, 36% were presently receiving inhaled corticosteroids, and among patients who used at least one beta 2 agonist metered-dose inhaler per month, 49% were presently receiving inhaled corticosteroids. Economic analyses showed that only 8% of the patients had either a hospital admission or an emergency room visit, but hospital costs among these patients accounted for 25% of the total costs of asthma care. In addition, the top 10% most expensive patients accounted for 42% of the total cost of asthma care. We conclude that a substantial proportion of patients at increased risk of a severe attack, by virtue of having a recent hospitalisation, do not receive maintenance anti-inflammatory therapy, and that hospitalisations among a relatively small proportion of asthma patients contribute significantly to the cost of asthma care.