Patient engagement has become a major focus of health reform. However, there is limited evidence showing that increases in patient engagement are associated with improved health outcomes or lower costs. This report examined the extent to which a single assessment of engagement, the Patient Activation Measure, was associated with health outcomes and costs over time, and whether changes in assessed activation were related to expected changes in outcomes and costs. The report uses data on adult primary care patients from a single large health care system where the Patient Activation Measure is routinely used. Results indicating higher activation in 2010 were associated with nine out of thirteen better health outcomes -- including better clinical indicators, more healthy behaviors, and greater use of women's preventive screening tests -- as well as with lower costs two years later. Changes in activation level were associated with changes in over half of the health outcomes examined, as well as costs, in the expected directions. These findings suggest that efforts to increase patient activation may help achieve key goals of health reform and that further research is warranted to examine whether the observed associations are causal.