BACKGROUND: The treatment of chronic heart failure has improved during the past 2 decades, but little is known about whether the improvements are reflected in trends in early and long-term mortality and hospital readmission. METHODS: In a retrospective cohort study of 2 540 838 elderly Medicare beneficiaries hospitalized with heart failure between January 1, 2001, and December 31, 2005, we examined early and long-term all-cause mortality and hospital readmission and patient- and hospital-level predictors of these outcomes. RESULTS: Unadjusted in-hospital mortality declined from 5.1% to 4.2% during the study (P < .001), but 30-day, 180-day, and 1-year all-cause mortality remained fairly constant at 11%, 26%, and 37%, respectively. Nearly 1 in 4 patients were readmitted within 30 days of the index hospitalization, and two-thirds were readmitted within 1 year. Controlling for patient- and hospital-level covariates, the hazard of all-cause mortality at 1 year was slightly lower in 2005 than in 2001 (hazard ratio, 0.98; 95% confidence interval, 0.97-0.99). The hazard of readmission did not decline significantly from 2001 to 2005 (hazard ratio, 0.99; 95% confidence interval, 0.98-1.00). CONCLUSIONS: Early and long-term all-cause mortality and hospital readmission rates remain high and have improved little with time. The need to identify optimal management strategies for these clinically complex patients is urgent.