Since 1963 a network of nurse-operated, physician-backed decentralized clinics has provided continuing care for more than 5000 diabetic patients referred from the medical center clinics. Protocols that provide therapy goals and management details are used by the nurses and nutritionists in this network. To reduce fragmentation of care, intercurrent illnesses as well as other chronic diseases are treated using protocols in these clinics or in the home. This study examines certain outcome data in a subset of 556 diabetic patients under continuing care over a 7-yr period in this network, with comparisons being made to care before referral. Blood glucose is maintained at comparable levels in both decentralized and hospital clinics. Blood pressure levels in hypertensive patients are maintained in a satisfactory range. Total hospitalization rates are reduced by 47%. For ketoacidosis and amputation, hospitalization is decreased by 69% compared with the experience before referral. The maintenance care costs are decreased substantially compared with costs before referral due to the less expensive ambulatory services and the reduced need for hospitalization. The data support the concept that decentralization is an effective means of providing continuing care to patients with diabetes mellitus.