OBJECTIVE: To use coronary revascularization choice to illustrate the application of a method simulating a treatment's effect on subsequent resource use. DATA SOURCES: Medicare inpatient and outpatient claims from 2002 to 2008 for patients receiving multivessel revascularization for symptomatic coronary disease in 2003-2004. STUDY DESIGN: This retrospective cohort study of 102,877 beneficiaries assessed survival, days in institutional settings, and Medicare payments for up to 6 years following receipt of percutaneous coronary intervention (PCI) or coronary artery bypass grafting (CABG). METHODS: A three-part estimator designed to provide robust estimates of a treatment's effect in the setting of mortality and censored follow-up was used. The estimator decomposes the treatment effect into effects attributable to survival differences versus treatment-related intensity of resource use. PRINCIPAL FINDINGS: After adjustment, on average CABG recipients survived 23 days longer, spent an 11 additional days in institutional settings, and had cumulative Medicare payments that were $12,834 higher than PCI recipients. The majority of the differences in institutional days and payments were due to intensity rather than survival effects. CONCLUSIONS: In this example, the survival benefit from CABG was modest and the resource implications were substantial, although further adjustments for treatment selection are needed.