OBJECTIVES: Because the outcomes and cost of caring for patients with ESRD are of major concern, we analyzed claims data of patients receiving exclusively either Calcium Acetate (CA) or Sevelamer HCl (SHCl). METHODS: From the California Medicaid (Medi-Cal) program we compared 1,401 ESRD patients who were prescribed CA and 192 who were prescribed SHCl during a 2-year period. RESULTS: For this population, the median daily dose and cost were 4447 mg ($0.55) for CA and 4030 mg for SHCl ($2.88), a significant difference by multivariate regression analysis that controlled for patient demographics, co-morbidities, hospital admissions, and time on binder. Not unexpectedly, comorbid conditions such as COPD, diabetes, heart disease, and hypertension were significantly associated with costs and number of hospital admissions. However, in patients who had been prescribed binder for at least 12 months, there was no statistically significant association between choice of binder, cardiovascular and other co-morbidities, downstream medical resource utilization or costs. Moreover, there was no difference between the binders with regard to time to first hospitalization as well as the number of hospital admissions. For a hypothetical cohort of 1000 ESRD patients treated over a 2-year period, the use of CA as a first-line agent, switching to SHCl only patients who become hypercalcemic, would save almost $1.4 million with no change in patient morbidity. Savings would be substantially greater if the same approach is followed for the entire US dialysis population. CONCLUSION: The choice of phosphate binder does not have a significant impact on the medical costs (except cost of phosphate binder), or number of hospitalizations, or time to hospitalization during follow-up for patients with ESRD. However, implementing a 2-stage strategy for phosphate binders has the potential to significantly reduce the cost of managing hyperphosphatemia in ESRD patients without having any detrimental effects on this population.