OBJECTIVES: Patient risk is identified by an increase in healthcare cost, the occurrence of hospitalization or emergency room (ER) event, and a decrease in time to hospitalization or ER event. The purpose of this research is to investigate factors associated with high-risk diabetic patients based on claims data from the California Medicaid (MediCal) program. METHODS: A retrospective study was conducted by using claims data from January 1995 to December 2000. Dependent variables were total healthcare cost, the occurrence of event, and time to event. Event included hospitalization or ER visits. Historical data including demographic factors, healthcare cost and utilization, type of drugs, increasing dose, adding drugs, changing drugs, follow-up services based on diabetic guidelines (e.g., office visit, lab tests, and self glucose monitoring), medication compliance, complications, and comorbidity were used as independent variables. The generalized estimating equation and the fixed effect partial likelihood methods were used in a longitudinal data set and a cross-sectional data set with repeatable events, respectively. RESULTS: Older age was related to an increase in patient risk. Healthcare cost and utilization in the previous period had a significant positive impact on patient risk in the next period. Patients taking both insulin and oral hypoglycemic drugs and patients having oral hypoglycemic or anti-hypertensive drugs added into the regimen were positively associated with an increase in patient risk. However, medication compliance was negatively related to an increase in patient risk. Follow-up services based on diabetic guidelines factors (i.e., having office visit, having glucose monitoring strip, having HbA1C test) were negatively associated with an increase in patient risk. Comorbidity factors (i.e., hypertension and hyperlipidemia) and three complication factors (i.e., retinopathy, nephropathy and foot infection) were positively related to patient risk. CONCLUSIONS: Factors associated with high-risk diabetic patients could help healthcare providers and administrators intervene to improve patient outcomes.