BACKGROUND: Ischemic heart disease (IHD) related to cardiovascular or cerebrovascular disease is the leading cause of mortality and an important issue of public health worldwide. The cost of long-term healthcare for IHD patients may result in a huge financial burden. OBJECTIVES: To analyze the medical expenditure incurred for and survival of IHD patients treated with Chinese herbal medicine (CHM) and Western medicine. METHODS: Subjects were randomly selected from the National Health Insurance Research Database in Taiwan. The Cox proportional hazards regression model, Kaplan-Meier estimator, logrank test, chi-square test, and analysis of variance were applied. Landmark analysis was used to assess the cumulative incidence of death in IHD patients. RESULTS: We identified 11,527 users of CHM combined with Western medicine and 11,527 non-CHM users. CHM users incurred a higher medical expenditure for outpatient care within 1 (24,529 NTD versus 18,464 NTD, value <0.0001) and 5 years (95,345 NTD versus 60,367 NTD, value <0.0001). However, CHM users had shorter hospitalizations and lower inpatient medical expenditure (7 days/43,394 NTD in 1 year; 11 days/83,141 NTD in 5 years) than non-CHM users (11 days/72,939 NTD in 1 year; 14 days/107,436 NTD in 5 years). The CHM group's adjusted hazard ratio for mortality was 0.41 lower than that of the non-CHM group by Cox proportional hazard models with time-dependent exposure covariates. Danshen, Huang qi, Niu xi, Da huang, and Fu zi were the most commonly prescribed Chinese single herbs; Zhi-Gan-Cao-Tang, Xue-Fu-Zhu-Yu-Tang, Tian-Wang-Bu-Xin-Dan, Sheng-Mai-San, and Yang-Xin-Tang were the five most frequently prescribed herbal formulas in Taiwan. CONCLUSIONS: Combining Chinese and Western medicine can reduce hospital expenditure and improve survival for IHD patients.