The formulation of a rational strategy for containing health care costs requires consideration of the cost-effectiveness of the various therapeutic alternatives available in order to assess the cost-effectiveness of myocardial revascularization in treating ischemic heart disease, the authors retrospectively analysed the costs of hospitalization and the long-term survival of 332 patients who underwent this procedure at the Victoria Hospital, London, Ontario, between 1974 and 1977. On the basis of angiographic findings the patients were divided into two groups: 51 patients who had advanced abnormalities in segmental wall motion of the left ventricle (group 1) and 281 patients who had relative preservation of left ventricular function (group 2). The presence of left ventricular dysfunction did not significantly increase the operative risk (operative mortality for group 1 v. group 2, 2.0% v. 1.8%), but showed a significant (P less than 0.01) effect on long-term survival (5-year actuarial survival rate +/- SEM for group 1 v. group 2, 74.7% +/- 9.5% v. 94.7% +/- 1.1%). Analysis of pertinent hospitalization data acquired from the Ontario Ministry of Health showed a highly significant (P less than 0.002) reduction in hospitalization expenses in the first postoperative year that continued throughout the 5-year follow-up period. The favourable effect of myocardial revascularization on long-term hospitalization costs, although evident in both groups of patients, was most marked in group 1 patients with compromised left ventricular function, as shown by the respective amortization times of costs for patients with left ventricular dysfunction, those with preserved function and for the two groups together: 22.3, 38.4 and 35.9 months postoperatively.