In service industries other than health care, unit employees who report a favorable service climate--characterized by commitment to a team concept and intrateam interactions that are supportive, collegial, and collaborative--have high levels of consumer satisfaction and work unit productivity. The authors evaluated whether similar primary care team (PCT) functioning influenced the short-term future health (SF-36) of elderly Medicare beneficiaries (N = 991) in a group model managed care organization (MCO). PCT functioning was assessed by surveys of practitioners and support staff on the MCO's 14 primary care practices and included measures of perceived task delegation, role collaboration, patient orientation, and team ownership. On average, patient physical and emotional health declined over 2 years. Medicare beneficiaries empanelled to relatively high functioning PCTs had significantly better physical and emotional health at 2 years following baseline assessment than those empanelled to relatively low functioning PCTs.