OBJECTIVE: To determine the average annual cost of treating asthma in a managed care population. METHODS: All subjects contained within Pharmetric s Integrated Outcomes database possessing a diagnosis of asthma (ICD-9-CM=493) during 1996-1998 were eligible for study inclusion. Patients were required to have 12 months of data following the first (index) asthma diagnosis present. Patients with the diagnosis of chronic obstructive pulmonary disease and coronary failure were excluded. Asthma specific and total medical charges were captured for the study period, as well as asthma-related and general hospitalizations. Charges, hospitalization and emergency department (ED) visit rates were compared across age categories (6-17, 18-44, 45+) and gender. RESULTS: 77,603 patients met the inclusion criteria. The mean age was 30.9 years (SE=0.061), and 60.6% of the sample was female. The mean annual asthma specific charges per patient was $ 926.68 (SE=9.59). Inpatient charges accounted for 48.9% of asthma-related expenses, while outpatient and pharmacy charges accounted for 25.0% and 24.6% respectively. Asthma-related costs increased with age (6-17: $683.61; 18-44: $962.24; 45+: $1,177.80). 10.0% of the identified patients were hospitalized for asthma within 12 months of index diagnosis. The rate of asthma-related hospitalization was similar across the three age categories. In addition, 5.3% of patients visited the ED due to asthma exacerbation during the 12 months of observation, with the rate of ED visits decreasing with age (6-17: 6.11%; 18-44: 5.87%; 45+: 3.45%). CONCLUSION: A substantial portion of asthmatics in this study required inpatient or emergency room care related to an asthma exacerbation. As hospitalization for asthma is often considered an avoidable outcome, these results point to the inadequacies of current preventive asthma treatment.