Many studies have shown that selected cardiac patients can be safely and economically cared for in intermediate care units rather than intensive care units. However, there are only limited data concerning intermediate care units for pulmonary patients. We prospectively followed up all Medicare patients from May 5, 1987, through May 4, 1988, who were admitted to a pulmonary noninvasive monitoring unit. Ninety-four patients were admitted 104 times; 33 required mechanical ventilatory support for an average of 26 days. The overall cost savings were greater than $173,000, while high-quality medical care was maintained. We conclude that a noninvasive monitoring unit can be effectively used as an alternative to the intensive care unit for selected pulmonary patients.