Objective: To evaluate the cost-effectiveness of treating all patients with type 2 diabetes.

Design: Markov model simulating the progression of diabetic nephropathy.

Data Sources: Randomized trials estimating the progression of diabetic nephropathy with and without angiotensin-converting enzyme inhibitors.

Target Population: Patients 50 years of age with newly diagnosed type 2 diabetes (fasting plasma glucose level greater than or equal to 7.8 mmol/L [140 mg/dL]).

Time Horizon: Lifetime.

Perspective: Societal.

Interventions: Patients received angiotensin-converting enzyme inhibitors, screening for microalbuminuria, or screening for gross proteinuria.

Outcome Measures: Lifetime cost, quality-adjusted life expectancy, and marginal cost-effectiveness.

Results of Base-Case Analysis: Screening for gross proteinuria had the highest cost and the lowest benefit. Compared with screening for microalbuminuria, treating all patients was more expensive ($15 240 and $14 940 per patient) but was associated with increased quality-adjusted life expectancy (11.82 and 11.78 quality-adjusted life-years). The marginal cost-effectiveness ratio was $7500 per quality-adjusted life-year gained.

Results of Sensitivity Analysis: Results were sensitive to the cost, effectiveness, and quality of life associated with angiotensin-converting enzyme inhibitor therapy, as well as age at diagnosis. The model was relatively insensitive to adherence with screening and costs of treating end-stage renal disease.

Conclusions: Treating all middle-aged diabetic patients with angiotensin-converting enzyme inhibitors is a simple strategy that provides additional benefit at modest additional cost. The strategy assumes that patients meet the older diagnostic criteria for diabetes and makes sense only for those who are not bothered by treatment.