Context In 2003, Medicare expanded coverage of ventricular assist devices as destination, or permanent, therapy for end- stage heart failure. Little is known about the long- term outcomes and costs associated with these devices. Objective To examine the acute and long- term outcomes of Medicare beneficiaries receiving ventricular assist devices alone or after open- heart surgery. Design, Setting, and Patients Analysis of inpatient claims from the Centers for Medicare & Medicaid Services for the period 2000 through 2006. Patients were Medicare fee- for- service beneficiaries who received a ventricular assist device between February 2000 and June 2006 alone as primary therapy ( primary device group; n= 1476) or after cardiotomy in the previous 30 days ( postcardiotomy group; n= 1467). Main Outcome Measures Cumulative incidence of device replacement, device removal, heart transplantation, readmission, and death, accounting for censoring and competing risks. Patients were followed up for at least 6 months and factors independently associated with long- term survival were identified. Medicare payments were used to calculate total inpatient costs and costs per day outside the hospital. Results Overall 1- year survival was 51.6% ( n= 669) in the primary device group and 30.8% ( n= 424) in the postcardiotomy group. Among primary device patients, 815 ( 55.2%) were discharged alive with a device. Of those, 450 (55.6%) were readmitted within 6 months and 504 (73.2%) were alive at 1 year. Of the 493 (33.6%) postcardiotomy patients discharged alive with a device, 237 (48.3%) were readmitted within 6 months and 355 (76.6%) were alive at 1 year. Mean 1- year Medicare payments for inpatient care for patients in the 2000- 2005 cohorts were $178714 (SD, $142549) in the primary device group and $ 111769 ( SD, $ 95413) in the postcardiotomy group. Conclusions Among Medicare beneficiaries receiving a ventricular assist device, early mortality, morbidity, and costs remain high. Improving patient selection and reducing perioperative mortality are critical for improving overall outcomes.