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Cost-effectiveness of full medicare coverage of angiotensin-converting enzyme inhibitors for beneficiaries with diabetes
Quantitative Health Sciences Publications and Presentations
  • Allison B. Rosen, University of Massachusetts Medical School
  • Mary Beth Hamel, Beth Israel Deaconess Medical Center
  • Milton C. Weinstein, Harvard School of Public Health
  • David M. Cutler, Harvard University
  • A. Mark Fendrick, University of Michigan Health Systems
  • Sandeep Vijan, Ann Arbor Veterans Affairs Medical Center
UMMS Affiliation
Department of Quantitative Health Sciences
Publication Date
Document Type
Aged; Angiotensin-Converting Enzyme Inhibitors; Cardiovascular Diseases; Cost-Benefit Analysis; Diabetes Mellitus, Type 1; Diabetes Mellitus, Type 2; Diabetic Angiopathies; Diabetic Nephropathies; Disease Progression; Drug Costs; Humans; Markov Chains; Medicare; Patient Compliance; Quality-Adjusted Life Years; Sensitivity and Specificity; United States

BACKGROUND: Angiotensin-converting enzyme (ACE) inhibitors slow renal disease progression and reduce cardiac morbidity and mortality in patients with diabetes. Patients' out-of-pocket costs pose a barrier to using this effective therapy.

OBJECTIVE: To estimate the cost-effectiveness to Medicare of first-dollar coverage (no cost sharing) of ACE inhibitors for beneficiaries with diabetes.

DESIGN: Markov model with costs and benefits discounted at 3%.

DATA SOURCES: Published literature and Medicare claims data.

TARGET POPULATION: 65-year-old Medicare beneficiary with diabetes.


PERSPECTIVE: Medicare and societal.

INTERVENTIONS: We evaluated Medicare first-dollar coverage of ACE inhibitors compared with current practice (no coverage) and the new Medicare drug benefit.

OUTCOME MEASURES: Costs (2003 U.S. dollars), quality-adjusted life-years (QALYs), life-years, and incremental cost-effectiveness.

RESULTS OF BASE-CASE ANALYSIS: Compared with current practice, first-dollar coverage of ACE inhibitors saved both lives and money (0.23 QALYs gained and 1606 USD saved per Medicare beneficiary). Compared with the new Medicare drug benefit, first-dollar coverage remained a dominant strategy (0.15 QALYs gained, 922 USD saved).

RESULTS OF SENSITIVITY ANALYSIS: Results were most sensitive to our estimate of increase in ACE inhibitor use; however, if ACE inhibitor use increased by only 7.2% (from 40% to 47.2%), first-dollar coverage would remain life-saving at no net cost to Medicare. In analyses conducted from the societal perspective, benefits were similar and cost savings were larger.

LIMITATIONS: Results depend on accuracy of the underlying data and assumptions. The effect of more generous drug coverage on medication adherence is uncertain.

CONCLUSIONS: Medicare first-dollar coverage of ACE inhibitors for beneficiaries with diabetes appears to extend life and reduce Medicare program costs. A reduction in program costs may result in more money to spend on other health care needs of the elderly.

Ann Intern Med. 2005 Jul 19;143(2):89-99.
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Citation Information
Allison B. Rosen, Mary Beth Hamel, Milton C. Weinstein, David M. Cutler, et al.. "Cost-effectiveness of full medicare coverage of angiotensin-converting enzyme inhibitors for beneficiaries with diabetes" Vol. 143 Iss. 2 (2005) ISSN: 0003-4819 (Linking)
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