OBJECTIVE: To evaluate the incremental differences of concurrent and persistent use of angiotensin-converting enzyme (ACE) inhibitors, beta-blockers, loop diuretics, and digoxin on the risk of hospitalization and total costs with heart failure patients enrolled in a managed care organization. METHODS: Retrospective database analysis of outpatients diagnosed with heart failure within a managed care organization covering 350,000 lives from January 1, 1997 to December 31, 1999. Linear and logistic regression models were used to examine the association between treatment regimens and all-cause hospitalizations or total direct medical costs after controlling for patient demographics, comorbidities, and other risk factors. RESULTS: Of the 1903 patients meeting inclusion and exclusion criteria, 33.2% (n=615) were observed not to have received any ACE inhibitor, beta-blocker, loop diuretic, digoxin, or angiotensin-receptor blockers (ARB). Subsequent multivariate analyses indicated that the associated risk of one year, all-cause hospitalization was 2.5 times higher (p<0.01) for patients taking none of these medications relative to the overall sample, followed by a 43.6% higher total health care costs (p<0.01). Patients receiving three or more of the specific medications analyzed were associated with significant decreases in risk of one year all-cause hospitalization of approximately 80% (p<0.01) and decreases in total costs of approximately 70% (p<0.01) relative to those utilizing no therapy. CONCLUSION: This analysis appears to indicate that a substantial portion of heart failure patients may be receiving suboptimal pharmacotherapeutic care, resulting in a higher associated risk of hospitalization and increase in total health care costs. Conversely, patients that were adherent with concurrent medication therapies were associated with decreases in both hospitalizations and total costs. The implications of this research suggest that quality improvement initiatives seek to identify and manage those not being treated or adherent to established evidence-based care.