OBJECTIVES: The “Coaching patients On Achieving Cardiovascular Health” (COACH) Program is a structured telephone and mail-out delivered program that trains people with chronic diseases including type 2 diabetes to achieve guideline-recommended target levels for their cardiovascular risk factors while working with their usual medical practitioners. Our aim was to evaluate the long-term cost-effectiveness of this innovative patient education program in type 2 diabetes patients in Tasmania. METHODS: Baseline cohort characteristics and treatment effects were derived from data collected by Diabetes Tasmania in a real life setting at baseline (N=975) and 18 months after a 6-month COACH Program training period. A published and validated simulation model of diabetes (IMS-CORE Diabetes Model) projected 24-month improvements in glycemic control, blood pressure and lipids to quality-adjusted life years (QALYs) and total lifetime direct costs in type 2 diabetes patients with The COACH Program+usual care versus usual care alone.   Australian-specific complication costs were taken from published sources.  The costs of The COACH Program were included. Analyses were run over patient lifetimes and were performed from a third-party payer perspective.  Future costs and QALYs gained were discounted at 5% per annum.  Probabilistic sensitivity analysis was performed. RESULTS: The COACH Program cost AUD1,296/patient to implement. After 6 months, HbA1c improved by mean (standard deviation) 0.35%-points (1.00%-points) from baseline of 7.15% (1.50%), and had a positive effect on lipid profile, BMI and blood pressure, translating into reduced risks of micro- and macrovascular complications, and increased QALYs of mean (95%CI) 0.058(0.023-0.092) years and increased costs of AUD 215(-902 to 1,333) per patient versus usual care alone, with an incremental cost-effectiveness ratio of AUD3,737/QALY gained. CONCLUSIONS: Long-term projections indicated that improved glycemic control, blood pressure and lipid profile sustained over an 18 month period following the 6 month COACH Program is highly cost effective in Type 2 diabetes patients in Tasmania.