Our objective was to evaluate in a demonstration project whether our T-Care Program, telecare management via an Internet-based home-messaging device, reduces resource utilization by patients with congestive heart failure (CHF), diabetes mellitus (DM), and chronic obstructive pulmonary disease (COPD). Study participants were drawn from a group of high resource-utilizing veterans over age 60 and included 19 patients with CHF, 23 with DM, and 17 with COPD. Data were gathered on hospital admissions, bed days of care (BDOC), outpatient admissions, and emergency department visits 6 months before and 6 months after enrollment in the telecare program. Nonparametric tests examined pre- and postintervention effects. For patients with CHF, significant decreases were found with T-Care in total emergency department visits (30 to 10, p = 0.03) and hospital admissions (20 to 8, p = 0.03). The decrease in BDOC (179 to 53) was not significant (p = 0.07). Outpatient visits were unchanged (71 to 83, p = 0.38). There were no significant changes for patients with COPD: the apparent BDOC decrease (115 to 46) was not significant (p = 0.24). The outpatient visits by patients with DM decreased significantly (199 to 143, p = 0.03), but no significance was found for changes in their emergency department visits, hospital admissions, and BDOC. The apparent BDOC increase (38 to 198, p = 0.23) was related to two patients with extended stays for an amputation and mitral valve surgery. We found that telecare models may reduce resource utilization in elderly patients with chronic diseases, especially in patients with CHF. Because of the small sample size and lack of controls, larger and more carefully designed follow-up trials are needed to determine cost efficiency for different chronic diseases, and the relative value of the interpersonal contact versus the technological components of this care coordination model.