Cost-effectiveness of full medicare coverage of angiotensin-converting enzyme inhibitors for beneficiaries with diabetes

Ann Intern Med. 2005 Jul 19;143(2):89-99. doi: 10.7326/0003-4819-143-2-200507190-00007.


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.

Time horizon: Lifetime.

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.

Publication types

  • Research Support, Non-U.S. Gov't
  • Research Support, U.S. Gov't, P.H.S.

MeSH terms

  • Aged
  • Angiotensin-Converting Enzyme Inhibitors / economics*
  • Angiotensin-Converting Enzyme Inhibitors / therapeutic use*
  • Cardiovascular Diseases / prevention & control*
  • Cost-Benefit Analysis
  • Diabetes Mellitus, Type 1 / complications
  • Diabetes Mellitus, Type 2 / complications
  • Diabetic Angiopathies / prevention & control*
  • Diabetic Nephropathies / prevention & control*
  • Disease Progression
  • Drug Costs
  • Humans
  • Markov Chains
  • Medicare / economics*
  • Patient Compliance
  • Quality-Adjusted Life Years
  • Sensitivity and Specificity
  • United States


  • Angiotensin-Converting Enzyme Inhibitors