(FORTUNE Magazine) – Michelle Whittington, 36, has suffered from serious asthma since childhood. Countless hours at the doctor's office often kept her away from her job at a Virginia investment company. Every few months her breathing became so labored that she landed in the emergency room. So when her insurer, Trigon Healthcare, asked her to participate in a program that could improve her health, she thought, "I'll try anything that might help."

A few days later a nurse called Whittington to schedule a home visit. Over the next year Whittington saw the nurse every month. She learned what happened to her body during an asthma attack, and why her prescribed medications (she's supposed to use three inhalers a day) should prevent it. "I didn't know any of that," says Whittington. Taking her medications used to be "hit or miss," she says, but now she sticks to a schedule. She's breathing better, staying at work, and hasn't seen the ER in over a year. "I'm really impressed," she says.

That doesn't sound like managed care as most of us experience it, but programs like Whittington's, which fall under the rubric of "disease management," may be the wave of the future. Analysts on Wall Street seem to be greatly enthusiastic. One of them, Joel Ray of First Union, predicts that this new business will soon become a $100 billion industry.

The concept is based on the fact that chronic diseases such as asthma, diabetes, and congestive heart failure affect only a small part of the population, but their frequent complications eat up health-care dollars. If information like medical claims and pharmacy data can identify high-risk people, then providing them with extra help may improve their health. That may, as it did with Whittington, curtail unpleasant and expensive trips to the doctor's office and the ER. In Whittington's case, she gets personalized mailings, phone centers staffed around the clock with nurses, and self-diagnostic kits that are simple but make a difference. "I'm finally understanding my asthma," she says.

The appeal is obvious. Disease management doesn't pretend to be groundbreaking science; it's a commonsense deployment of scarce resources. In theory, it offers a clean solution to the problems of rising costs and rebelling consumers that are plaguing the managed-care industry. Its advocates are careful to say that good health care is the top priority--but they add that lower cost will be a function of higher quality. "We are all uniformly convinced that truly good medicine is less expensive medicine," says Dr. Victor Villagra, who runs Cigna's medical-care management.

As self-serving as that statement sounds, early data show that it may be true. Humana's peer-reviewed study of 2,000 patients using its cardiac program showed a 61% decrease in inpatient cost and an 8% overall improvement in the patients' general health. Diabetes Treatment Centers of America, which manages diabetics on behalf of managed-care companies, has a peer-reviewed analysis of 7,000 patients showing hospitalizations down 18% and costs down 12% in the first year.

It's hard to argue with the logic of disease management. But not impossible: As critics point out, these are isolated studies, and we have yet to see wholesale transformation in the quality of care. The strongest opposition may come from patients themselves. Whether it's fear of the new and Big-Brotherish or simply laziness, some patients just will not sign on without some serious persuading. Already some programs try to lure the reluctant with goodies like Beanie Babies.

And if Beanie Babies don't do it, money might. Pieter Muntendam, the CEO of ProMedex, a disease-management company, thinks that patients and their insurers will eventually be persuaded by cost savings. For example, a diabetic may receive a 50% to 100% refund on her insulin co-pay. That sounds like managed care anyone could live with.

--Bethany McLean