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Although anemia is common in older adults, its prognostic significance is uncertain. A total of 17 030 community-dwelling subjects 66 years and older were identified between July 1 and December 31, 2001, and followed until December 31, 2004. Cox proportional hazards analyses were performed to determine the associations between anemia (defined as hemoglobin < 110 g/L) and hemoglobin and all-cause mortality, all-cause hospitalization, and cardiovascular-specific hospitalization. Overall, there were 1983 deaths and 7278 first hospitalizations. In patients with normal kidney function, adjusting for age, sex, diabetes mellitus, and comorbidity, anemia was associated with an increased risk for death (hazard ratio [HR], 4.29; 95% confidence interval [CI], 3.55-5.12), first all-cause hospitalization (HR, 2.16; 95% CI, 1.88-2.48), and first cardiovascular-specific hospitalization (HR, 2.49; 95% CI, 1.99-3.12). An inverse J-shaped relationship between hemoglobin and all-cause mortality was observed; the lowest risk for mortality occurred at hemoglobin values between 130 to 150 g/L for women and 140 to 170 g/L for men. Anemia is associated with an increased risk for hospitalization and death in community-dwelling older adults. Consideration should be given to redefine "normal" hemoglobin values in the elderly. Clinical trials are also necessary to determine whether anemia correction improves quality or quantity of life in this population.