OBJECTIVE: A critical factor used by health care organizations in evaluating new medications is baseline data on current costs of treating the disease in question. This study investigated the healthcare use and cost patterns for PD patients in the Medi-Cal program. METHODS: The data for the analysis were derived from the paid claims data of Medi-Cal program from January 1987 to July 1996. Up to 4 years of episodic anti-PD drug use patterns and associated direct healthcare costs were abstracted for each patient. Descriptive statistics and multivariate OLS models were employed in the study. RESULTS: Although a significant proportion of PD patients did not use any anti-PD regimen during the first year (23.4% of institutionalized patients, 17.5% of community-based patients), anti-PD drug use was negatively correlated with total first-year healthcare costs (yet not significant) in both groups. Significant association was found between prior hospitalization and healthcare costs (P<0.0001). No statistically significant differences were found across alternative anti-PD medications when used as initial therapy for both community-based and institutionalized patients. Healthcare expenditures of community-based patients increased from approximately $11,000 per patient for the first treatment year to over $27,000 per patient-year by the end of 4 years. Annual costs for institutionalized patients in the first year exceeded $85,000 per patient-year and decreased slightly over 4 years. Compliance rate in community-based PD patients was significantly lower than that of institutionalized patients (25% Vs 57%, p<0.001). CONCLUSIONS: Anti-PD drug therapy might have potential cost saving effect on first-year healthcare services. Prior use of hospital service was a significant predictor of overall direct healthcare costs of PD patients in the Medi-Cal program.