OBJECTIVES: Congestive heart failure (CHF) is the leading cause for hospitalization in the elderly. In a meta-analysis of 16 randomized controlled trials (RCT) investigating disease management programs (DMP) in the treatment of CHF, we previously demonstrated a statistically significant reduction in mortality and rehospitalization, but cost-effectiveness of DMPs remains uncertain. Therefore, we sought to evaluate life expectancy and life long medical costs for DMPs. METHODS: Design: Cost and cost-effectiveness analysis using a 6 state Markov Model representing the number of prior hospitalizations (h=1 to h=4+) and death. Data sources: Pooled efficacy data from our meta-analyses of RCTs, SOLVD registry data for age-dependent hospitalizations and mortality rates adjusted for additional benefit from beta-blocker therapy and reimbursement costs in the Australian health care system. Target population: Patients that have been admitted with CHF. Time horizon: lifetime. Perspective: societal. Intervention: conventional therapy and DMP. Outcome measures: Life years gained (LYG) and lifelong direct medical costs. RESULTS: For a population aged 73 at onset of CHF (27% female, 33% on beta-blocker), our model yielded, on average, a remaining life expectancy of 3.24 years for conventional therapy and 3.38 years for DMP. Mean undiscounted lifetime costs per patient were estimated at 11,600€ and 12,700€ respectively. The discounted incremental cost-effectiveness ratio (ICER) of DMP vs. conventional care was 8,813€ per LYG. Assuming the benefit due to DMP lasting for 5 years after the end of the actual intervention would lead to additional 5 life-months and reduce ICER to 4021€/LYG. CONCLUSIONS: Based on our decision analysis, DMPs prolong life, but increase life-time costs. A cost-saving effect of DMPs as suggested in some original studies could not be confirmed. However, even under conservative assumptions regarding the duration of DMP, these programs are cost-effective when compared to other well-accepted medical interventions in heart disease.