U.S. SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20549

                                   FORM 10-QSB

                   QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934


For the quarter ended:                                   Commission File Number:
    March 31, 2003                                              0-27554
----------------------                                   -----------------------

                      PACE Health Management Systems, Inc.
                      ------------------------------------
        (Exact name of small business issuer as specified in its charter)

             Iowa                                        42-1297992
-------------------------------             ------------------------------------
(State or other jurisdiction of             (IRS Employer Identification Number)
incorporation or organization)

                              2116 Financial Center
                                   666 Walnut
                              Des Moines, IA 50309
       -------------------------------------------------------------------
              (Address and zip code of principal executive offices)


                                 (515) 244-5746
       -------------------------------------------------------------------
                Issuer's telephone -number, including area code)

Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12
months (or for such shorter period that the registrant was required to file such
reports), and (2) has been subject of the filing requirements for at least the
past 90 days. YES _X_ NO ___

State the number of shares outstanding of each of the issuer's classes of common
stock, as of the latest practicable date:

                                         Number of Shares Outstanding
                Class                            May 12, 2003
                -----                            ------------
        Common Stock, no par                       5,716,074

Transitional Small Business Disclosure Format (Check one): YES ___ NO _X_.

                                       1
<PAGE>

                      PACE HEALTH MANAGEMENT SYSTEMS, INC.


                          PART I. FINANCIAL INFORMATION
                                  ---------------------

ITEM 1. FINANCIAL STATEMENTS (UNAUDITED)                                    Page
                                                                            ----

  Condensed Balance Sheets
       March 31, 2003 and December 31, 2002                                   3

  Condensed Statements of Operations
       Three Months Ended March 31, 2003 and 2002                             4

  Condensed Statements of Cash Flows
       Three Months Ended March 31, 2003 and 2002                             5

  Notes to Condensed Financial Statements                                     6

  ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OR
       PLAN OF OPERATION                                                      7

  ITEM 3.  DISCLOSURE CONTROLS AND PROCEDURES                                 8


                           PART II. OTHER INFORMATION
                                    -----------------

  ITEM 1.  LEGAL PROCEEDINGS                                                  8

  ITEM 2.  CHANGES IN SECURITIES                                              8

  ITEM 3.  DEFAULTS UPON SENIOR SECURITIES                                    8

  ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS                8

  ITEM 5.  OTHER INFORMATION                                                  8

  ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K                                   8



                                       2
<PAGE>

                          PART 1. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

PACE HEALTH MANAGEMENT SYSTEMS, INC.
CONDENSED BALANCE SHEETS (UNAUDITED)
--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
                                                                             MARCH 31,        DECEMBER 31,
                                                                               2003               2002
                                                                           ------------       ------------
<S>                                                                        <C>                <C>
  ASSETS
  CURRENT ASSETS:
     Cash and cash equivalents                                             $    981,021       $    987,346
     Certificate of deposit                                                   1,000,000          1,000,000
     Accounts receivable                                                             20                 20
     Prepaid expenses                                                             2,163              8,650
                                                                           ------------       ------------
                                                                           $  1,983,204       $  1,996,016
                                                                           ============       ============

LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
     Accounts payable                                                      $     10,892       $      4,048
                                                                           ------------       ------------
         TOTAL CURRENT LIABILITIES                                               10,892              4,048
                                                                           ------------       ------------

SHAREHOLDERS' EQUITY:
     Preferred stock, no par value, authorized 1,000,000 shares;
         issued none                                                                 --                 --
     Convertible participating preferred stock, Series A, no par
         value; authorized 4,000,000 shares; issued and outstanding
         2,875,000 shares                                                     2,875,000          2,875,000
     Common stock, no par value; authorized 20,000,000 shares; issued
         and outstanding 5,716,074 shares                                    17,065,136         17,065,136
     Additional paid-in capital                                                 673,486            673,486
     Accumulated deficit                                                    (18,641,310)       (18,621,654)
                                                                           ------------       ------------
                                                                              1,972,312          1,991,968
                                                                           ------------       ------------
                                                                           $  1,983,204       $  1,996,016
                                                                           ============       ============
</TABLE>

See Notes to Condensed Financial Statements.

                                       3
<PAGE>

PACE HEALTH MANAGEMENT SYSTEMS, INC.
CONDENSED STATEMENTS OF OPERATIONS (UNAUDITED)
--------------------------------------------------------------------------------

                                                     THREE MONTHS ENDED
                                                          MARCH 31,
                                                ---------------------------
                                                    2003            2002
                                                -----------     -----------
NET REVENUES                                    $        --     $        --
                                                -----------     -----------

COSTS AND EXPENSES
     General and administrative                      27,949          19,532
                                                -----------     -----------
                                                     27,949          19,532
                                                -----------     -----------
         (LOSS) FROM OPERATIONS                     (27,949)        (19,532)

INTEREST INCOME                                       8,293           8,986
                                                -----------     -----------
         (LOSS) BEFORE INCOME TAXES                 (19,656)        (10,546)

PROVISION FOR INCOME TAXES                               --              --
                                                -----------     -----------
         NET (LOSS)                             $   (19,656)    $   (10,546)
PREFERRED DIVIDENDS IN ARREARS                      (71,875)        (71,875)
                                                -----------     -----------
         NET (LOSS) AVAILABLE TO COMMON
         SHAREHOLDERS                           $   (91,531)    $   (82,421)
                                                ===========     ===========

(LOSS) PER SHARE
    Basic                                       $     (0.02)    $     (0.01)
                                                ===========     ===========
    Fully diluted                               $     (0.02)    $     (0.01)
                                                ===========     ===========

WEIGHTED AVERAGE NUMBER OF COMMON AND COMMON
EQUIVALENT SHARES OUTSTANDING                     5,716,074       5,716,074
                                                ===========     ===========


See Notes to Condensed Financial Statements.


                                       4
<PAGE>

PACE HEALTH MANAGEMENT SYSTEMS, INC.
CONDENSED STATEMENTS OF CASH FLOWS (UNAUDITED)
--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
                                                                   THREE MONTHS ENDED
                                                                        MARCH 31,
                                                              ---------------------------
CASH FLOWS FROM OPERATING ACTIVITIES                              2003            2002
                                                              -----------     -----------
<S>                                                           <C>             <C>
Net (Loss)                                                    $   (19,656)    $   (10,546)
Change in working capital components:
     Decrease in prepaid expenses and other current assets          6,487           6,124
     Increase (decrease) in accounts payable                        6,844          (2,833)
                                                              -----------     -----------
         NET CASH (USED IN) OPERATING ACTIVITIES                   (6,325)         (7,255)
                                                              -----------     -----------

           NET (DECREASE) IN CASH AND CASH EQUIVALENTS             (6,325)         (7,255)

CASH AND CASH EQUIVALENTS
Beginning                                                         987,346       2,043,827
                                                              -----------     -----------
Ending                                                        $   981,021     $ 2,036,572
                                                              ===========     ===========
</TABLE>


See Notes to Condensed Financial Statements.




                                       5
<PAGE>

PACE HEALTH MANAGEMENT SYSTEMS, INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED)
--------------------------------------------------------------------------------

NOTE 1. BASIS OF PRESENTATION

The accompanying financial information should be read in conjunction with the
annual financial statements and notes thereto for the year ended December 31,
2002. The financial information included herein is unaudited; such information
reflects all adjustments, which, in the opinion of management, are necessary in
order to make the financial statements not misleading.

The results of operations for the three months are not necessarily indicative of
the results to be expected for the entire fiscal year.

NOTE 2. STOCK-BASED COMPENSATION

On January 1, 1996, the Company adopted Statement of Financial Accounting
Standards (SFAS) No. 123, Accounting for Stock-Based Compensation as amended by
SFAS 148, which establishes a fair value based method for financial accounting
and reporting for stock-based employee compensation plans and for transactions
in which an entity issues its equity instruments to acquire goods and services
from non-employees. However, SFAS 123 allows employee compensation to continue
to be measured by using the intrinsic value based method of accounting
prescribed by Accounting Principles Board Opinion (APBO) No. 25, Accounting for
Stock Issued to Employees, but requires expanded disclosures. The Company has
elected to continue to apply the intrinsic value based method of accounting for
stock-based employee compensation. Accordingly, compensation cost for stock
options issued to employees is measured as the excess, if any, of the quoted
market price of the Company's stock at the date of grant over the amount an
employee must pay to acquire the stock. No compensation cost has been recognized
for its option plans for the three months ended March 31, 2003 and 2002.

NOTE 3. BASIC AND DILUTED (LOSS) PER SHARE

In February 1997, the Financial Accounting Standards Board (FASB) issued
Statement of Financial Accounting Standards (SFAS) No. 128, Earnings per Share,
which requires the Company to present basic and diluted income (loss) per share
amounts. Basic income (loss) per share is based on the weighted average number
of common shares outstanding during the period. Diluted income (loss) per share
is based on the weighted average number of common shares and dilutive potential
common shares outstanding during the period. Dilutive potential common shares
consist of stock options and warrants (using the treasury stock method) and
convertible preferred stock (using the if-converted method). The effect of stock
options, warrants, and convertible preferred stock was not included in the
computation because to do so would have been antidilutive. At March 31, 2003,
there are approximately 570,000 shares issuable under warrant or option
arrangements and 5,750,000 shares issuable under conversion of Series A
convertible participating preferred stock.

NOTE 4. RELATED PARTY TRANSACTIONS

Administration expenses paid to Equity Dynamics, Inc., an entity wholly owned by
a Director of the Company, totaled $12,500 and $10,511 for the three months
ended March 31, 2003 and 2002, respectively.

                                       6
<PAGE>

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

GENERAL

Prior to October 1998, PACE developed and marketed advanced patient care
management software systems that enabled healthcare providers to standardize the
delivery of care, maximize resource utilization and improve clinical outcomes.
The Company's enterprise-wide, client/server applications automated charting,
clinical workflow processes and clinical pathways. The Company's core system,
PACE CMS, was a modular suite of advanced software applications that provided
hospitals, physicians' offices, and integrated delivery systems a comprehensive
system for interdisciplinary documentation, nursing care planning, clinical
pathway management and enterprise-wide order management, all at the point of
care.

On October 7, 1998, the Company completed the sale of substantially all of its
assets to, and the assumption of certain of its liabilities by, Minnesota Mining
and Manufacturing Company ("3M") ("the Transaction"). The sale was made pursuant
to an Asset Purchase Agreement dated June 30, 1998, as amended, as described in
Company's definitive proxy statement dated September 14, 1998. The Transaction
was approved by the holders of both the common stock and the preferred stock at
a special meeting of shareholders held on October 7, 1998.

The purchase price of the Transaction was approximately $5.9 million, including
$4.75 million in cash, of which $750,000 was originally placed in escrow to
secure the Company's indemnification obligations under the Asset Purchase
Agreement, plus the assumption of substantially all of the Company's liabilities
other than $2.1 million in line of credit balances, which were paid off from
proceeds at closing. 3M offered positions to most of the Company's employees and
assumed full support of the Company's customers. Subsequent to the closing of
the Transaction, the Company agreed that $25,000 of the amount in escrow could
be paid to 3M as part of a purchase price adjustment contemplated by the Asset
Purchase Agreement, leaving an escrow balance of $725,000.

In July 1999, the Company received proceeds from the restricted escrow account
totaling approximately $525,000. In December 2000, the Company received final
proceeds from the restricted escrow account totaling $104,953. A like amount was
also paid to 3M in final settlement and as an adjustment to the purchase price.

Following the Transaction, the Company has no ongoing operations and no revenues
and has minimal operating expenses. The Company presently has no employees. The
Company's March 31, 2003 balance sheet reflects cash, cash equivalents, and a
certificate of deposit of approximately $2 million and no material liabilities.

The net proceeds from the sale will be retained by the Company pending a
determination of whether to engage in a follow-on transaction. The Company has
been seeking a business combination with another entity, before considering
possible liquidation and distribution of its assets. The Company believes that
with the cash on hand and net operating loss carryforwards, subject to the
limitation of such carryforwards under the Internal Revenue Code, such a
combination may be attractive to potential partners and would better serve the
interests of the Company's shareholders. As of the date of this Form 10-QSB, no
definitive agreement has been signed for a follow-on transaction. If no suitable
business combination is identified within a reasonable period of time, the
Company may elect to liquidate and distribute the remaining net proceeds to
shareholders. If the Company liquidated at the present time, all of the net
assets of the Company would be paid to holders of the Company's preferred stock.

RESULTS OF OPERATIONS

GENERAL AND ADMINISTRATIVE: General and administrative expenses include
bookkeeping costs, legal fees, expenses associated with shareholder relations
and SEC reporting requirements, and insurance. General and

                                       7
<PAGE>

administrative expenses were $27,949 and $19,532 for the three months ended
March 31, 2003 and 2002, respectively, representing an increase of 43.1%, due
mainly to a timing difference in the billing of audit fees.

INTEREST INCOME: Interest income was $8,293 and $8,986 for the three months
ended March 31, 2003 and 2002, respectively, representing a decrease of 7.7%,
due mainly to a decrease in the total cash, cash equivalents and certificate of
deposits from the prior year.

PROVISION FOR INCOME TAXES: No provision for income tax benefit has been
recorded due to the Company recording a valuation allowance on the deferred tax
assets.

LIQUIDITY AND CAPITAL RESOURCES

Net cash used in operating activities for the three months ended March 31, 2003
and March 31, 2002 was $6,325 and $7,255, respectively. Following the
Transaction, the Company has no ongoing operations and no revenues and has
minimal operating expenses. The Company's March 31, 2003 balance sheet reflects
cash, cash equivalents, and a certificate of deposit of approximately $2 million
and no material liabilities.

The net proceeds from the sale will be retained by the Company pending a
determination of whether to engage in a follow-on transaction. The Company has
been seeking a business combination with another entity, before considering
possible liquidation and distribution of its assets. As of the date of this Form
10-QSB, no definitive agreement has been signed for a follow-on transaction. If
no suitable business combination is identified, the Company may elect to
liquidate and distribute the remaining net proceeds to shareholders. If the
Company liquidated at the present time, all of the net assets of the Company
would be paid to holders of the Company's preferred stock.

ITEM 3. DISCLOSURE CONTROLS AND PROCEDURES

Based on his evaluation conducted within 90 days of this report on Form 10-QSB,
our director and acting chief executive and financial officer has concluded that
our disclosure controls and procedures (as defined in Rules 13a-14(c) and
15d-14(c) promulgated under Securities Exchange Act of 1934, as amended) are
effective and designed to alert him to material information relating to PACE.

There were no significant changes in the Company's internal controls or in other
factors that could significantly affect those controls subsequent to the date of
our most recent evaluation.

                           PART II. OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS
     N/A

ITEM 2.  CHANGES IN SECURITIES
     N/A

ITEM 3.  DEFAULTS UPON SENIOR SECURITIES
     N/A

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
     N/A

ITEM 5.  OTHER INFORMATION.
     N/A

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K
     (a)  Exhibits

                                       8
<PAGE>

              99.1  Certification by Director and Acting Chief Executive Officer
              99.2  Certification by Director and Acting Chief Financial Officer
     (b) Reports on Form 8-K
              No reports on Form 8-K were filed during the quarter for which
              this report is filed.





                                   SIGNATURES

In accordance with requirements of the Exchange Act, the registrant caused this
report to be signed on its behalf by the undersigned, thereunto duly authorized.


PACE HEALTH MANAGEMENT SYSTEMS, INC.
------------------------------------
(Registrant)

      May 12, 2003                                    /s/ John Pappajohn
--------------------------                     ---------------------------------
          Dated                                     John Pappajohn, Director




                                       9
<PAGE>

                  CERTIFICATION PURSUANT TO 18 U.S.C. ss.1350,
                             AS ADOPTED PURSUANT TO
                  SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002


I, John Pappajohn, certify that:

1)   I have reviewed this quarterly report on Form 10-QSB of PACE Health
     Management Systems, Inc.;

2)   Based on my knowledge, this quarterly report does not contain any untrue
     statement of a material fact or omit to state a material fact necessary to
     make the statements made, in light of the circumstances under which such
     statements were made, not misleading with respect to the period covered by
     this quarterly report;

3)   Based on my knowledge, the financial statements, and other financial
     information included in this quarterly report, fairly present in all
     material respects the financial condition, results of operations and cash
     flows of the registrant as of, and for, the periods presented in this
     quarterly report;

4)   The registrant's other certifying officers and I are responsible for
     establishing and maintaining disclosure controls and procedures (as defined
     in Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:

     a)   designed such disclosure controls and procedures to ensure that
          material information relating to the registrant, including its
          consolidated subsidiaries, is made known to us by others within those
          entities, particularly during the period in which this quarterly
          report is being prepared;

     b)   evaluated the effectiveness of the registrant's disclosure controls
          and procedures as of a date within 90 days prior to the filing date of
          this quarterly report (the "Evaluation Date"); and

     c)   presented in this quarterly report our conclusions about the
          effectiveness of the disclosure controls and procedures based on our
          evaluation as of the Evaluation Date;

5.   The registrant's other certifying officers and I have disclosed, based on
     our most recent evaluation, to the registrant's auditors and the audit
     committee of registrant's board of directors (or persons performing the
     equivalent functions):

     a)   all significant deficiencies in the design or operation of internal
          controls which could adversely affect the registrant's ability to
          record, process, summarize and report financial data and have
          identified for the registrant's auditors any material weaknesses in
          internal controls; and

     b)   any fraud, whether or not material, that involves management or other
          employees who have a significant role in the registrant's internal
          controls;

                                       10
<PAGE>

6.   The registrant's other certifying officers and I have indicated in this
     quarterly report whether there were significant changes in internal
     controls or in other factors that could significantly affect internal
     controls subsequent to the date of our most recent evaluation, including
     any corrective actions with regard to significant deficiencies and material
     weaknesses.


                                                         /s/ John Pappajohn
                                                         -----------------------
                                                         John Pappajohn
                                                         Director and Acting CEO
                                                         May 12, 2003


                  CERTIFICATION PURSUANT TO 18 U.S.C. ss.1350,
                             AS ADOPTED PURSUANT TO
                  SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002


I, John Pappajohn, certify that:

1)   I have reviewed this quarterly report on Form 10-QSB of PACE Health
     Management Systems, Inc.;

2)   Based on my knowledge, this quarterly report does not contain any untrue
     statement of a material fact or omit to state a material fact necessary to
     make the statements made, in light of the circumstances under which such
     statements were made, not misleading with respect to the period covered by
     this quarterly report;

3)   Based on my knowledge, the financial statements, and other financial
     information included in this quarterly report, fairly present in all
     material respects the financial condition, results of operations and cash
     flows of the registrant as of, and for, the periods presented in this
     quarterly report;

4)   The registrant's other certifying officers and I are responsible for
     establishing and maintaining disclosure controls and procedures (as defined
     in Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:

     a)   designed such disclosure controls and procedures to ensure that
          material information relating to the registrant, including its
          consolidated subsidiaries, is made known to us by others within those
          entities, particularly during the period in which this quarterly
          report is being prepared;

     b)   evaluated the effectiveness of the registrant's disclosure controls
          and procedures as of a date within 90 days prior to the filing date of
          this quarterly report (the "Evaluation Date"); and

     c)   presented in this quarterly report our conclusions about the
          effectiveness of the disclosure controls and procedures based on our
          evaluation as of the Evaluation Date;

                                       11
<PAGE>

5.   The registrant's other certifying officers and I have disclosed, based on
     our most recent evaluation, to the registrant's auditors and the audit
     committee of registrant's board of directors (or persons performing the
     equivalent functions):

     a)   all significant deficiencies in the design or operation of internal
          controls which could adversely affect the registrant's ability to
          record, process, summarize and report financial data and have
          identified for the registrant's auditors any material weaknesses in
          internal controls; and

     b)   any fraud, whether or not material, that involves management or other
          employees who have a significant role in the registrant's internal
          controls;

6.   The registrant's other certifying officers and I have indicated in this
     quarterly report whether there were significant changes in internal
     controls or in other factors that could significantly affect internal
     controls subsequent to the date of our most recent evaluation, including
     any corrective actions with regard to significant deficiencies and material
     weaknesses.


                                                         /s/ John Pappajohn
                                                         -----------------------
                                                         John Pappajohn
                                                         Director and Acting CFO
                                                         May 12, 2003







                                       12