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Background: The impact of atrial fibrillation (AF) on mortality, stroke, and medical costs is unknown. Methods: We conducted a prospective cohort study of hospitalized Medicare patients with AF and 1 other cardiovascular diagnosis (CVD) compared with a matched group without AF (n=26 753), randomly selected in 6 age-sex strata from 1989 MedPAR files of more than 1 million patients diagnosed as having AF. Stroke rates were also determined in another cohort free of CVD (n=14 267). Total medical costs after hospitalization were available from a 1991 cohort. Cumulative mortality, stroke rates, and costs following index admission were adjusted by multivariate and proportional hazard regression analyses. Results: Mortality rates were high in individuals with CVD, ranging from 19.0% to 52.1% in 1 year. Adjusted relative mortality risk was approximately 20% higher in patients with AF in all age-sex strata during each of the 3 years studied (P<.05). Incidence of stroke was high in individuals with CVD, 6.2% to 15.4% in 1 year, with and without AF, and was at least 5-fold higher than in individuals without CVD. In those with CVD, stroke rates were approximately 25% higher in women with AF (P<.05) but only 10% higher in men. Adjusted total Medicare spending in 1 year was 8.6- to 22.6-fold greater in men, and 9.8-to 11.2-fold greater in women with AF (P<.05). Second-and third-year costs were increased as well. Conclusion: Prevention of AF and treatment of patients with Af; and associated CVD may yield benefits in reduced mortality and stroke as well as reducing health care costs