OBJECTIVE: The study purpose was to identify the effect of compliance with conjugated estrogen on subsequent clinical event rates and their economic impact. METHODS: Claims from a large Midwest health care plan were screened to identify females receiving a new prescription for conjugated estrogen from 7/1/93 to 6/30/94 and continuing enrollment to 12/31/96. Compliance was calculated by prescription fill quantity divided by enrollment days. Two subgroups (100% compliant versus one prescription only) were analyzed. Endpoints were the diagnosis of depression, myocardial infarction, or congestive heart failure, physician office visits, and total health care expenditures. RESULTS: 1112 patients (mean age 57.87) were 100% compliant; mean follow up, 42.1 months. 900 patients (mean age 57.62) received one prescription only; mean follow up, 41.8 months. Diagnostic rates between the groups were not different for depression, but less (p>.05) in the compliant group for cardiovascular disorders. Office visit rates were less (p>.0001) in the compliant group for depression and cardiovascular disorders. Total health care expenditures were $220 per patient per month (pppm) for the compliant group and $251 pppm for the non-compliant group (p>.05). Pharmacy expenditures were higher in the compliant group ($74.84 to $53.62 pppm), but medical costs in the non-compliant group exceeded that differential. CONCLUSIONS: Compliance with conjugated estrogen therapy reduced the diagnostic rate of selected cardiovascular disorders and decreased office visit rates for selected disorders. Total health care expenditure was less in the compliant group. The relatively short time frame to these results is especially attractive to health care plans.