To estimate the independent effects of kidney disease, anemia, and the treatment effects of angiotensin-converting enzyme (ACE) inhibitors on hospitalization cost in patients with heart failure, we used data from the prevention and treatment trials of the Studies of Left Ventricular Dysfunction trial and retrospectively estimated the relative effects of decreased kidney function, as measured by estimated glomerular filtration rate (GFR) at enrollment, and anemia, as measured by hematocrit levels at enrollment, on hospital utilization and expense. Independent of the effects of age, gender, New York Heart Association (NYHA) class, ejection fraction, and the presence of diabetes mellitus, GFR was significantly related to hospitalization expense (percent change in hospitalization expense -16.8%, 95% confidence interval [CI] -11.9% to -21.5%) for GFR >/=90 ml/min/1.73 m(2) compared with GFR <60 ml/min/1.73 m(2)). Similarly, hematocrit levels were significantly related to hospitalization expense (percent change in hospitalization expense -19.9%, 95% CI -10.2% to -28.6%) for hematocrit >/=36% compared with hematocrit <33%). The beneficial effect of the ACE inhibitor enalapril was significantly related to hospitalization expense independent of the effects of GFR and hematocrit (percent change in hospitalization expense -6.8%, 95% CI -3.6% to -9.9% for treatment vs the placebo group), and the beneficial effect was preserved when independently estimated for subgroups with decreased kidney function. Adjusted mean expense per patient per month (PPPM) in the enalapril group was $708 versus $792 in the placebo group. Comparing survivors, enalapril generated annual cost savings greater than the average wholesale price of the drug at Studies of Left Ventricular Dysfunction mean dosage levels. Adjusted expected hospitalization expense varied from $636 PPPM for patients in the lowest hematocrit-GFR risk class (hematocrit >/=36%, GFR >/=90 ml/min/1.73 m(2)) to $1,127 PPPM for those in the highest risk class (hematocrit <33%, GFR <60 ml/min/1.73 m(2)). For patients who survived with reduced kidney function and anemia, ACE inhibitor therapy with enalapril reduced hospitalization expense more than the additional expense of the drug therapy. Thus, kidney disease and anemia are independent risk factors for hospitalization cost in patients with heart failure, and the beneficial effect of ACE inhibitors on hospitalization expense appears to be preserved within kidney disease and anemia subgroups.