There has been increasing concern in the medical, business, and insurance communities and government agencies about the rising cost of health care. Since 1980 the cost of medical care has increased from $280 billion dollars per year to $670 billion dollars in 1990, and was estimated at $900 billion in 1993. Several factors have contributed to this increase, including the high cost of hospitalization and new expensive technology, such as laparoscopic cholecystectomy. This present cost analysis was undertaken to determine the cost variables in laparoscopic cholecystectomy to see if changes in physician, nursing, and administration work activities could decrease the cost of hospitalization. Fifty-four patients who had an uncomplicated elective cholecystectomy during a five-month period in 1993 were assessed in terms of cost components of hospitalization, including nursing unit labor costs, surgery personnel labor costs, supply/instrument cost, and ancillary costs. Nine general surgeons participated in this study, four of whom accounted for 71% of the annual volume of cases. This analysis was performed with the help of Baxter Corporate Consulting, a Division of Baxter Healthcare Corporation. From this study, it was found that the average cost for uncomplicated laparoscopic cholecystectomy patients was $1589 +/- $223. The operating room and supply/instrument component costs were the two largest expenses, accounting for 42% of the total cost. Reimbursement from various insurance agencies were also evaluated, and it was determined that a contract made with a local HMO caused the hospital to lose an average of $443.00 per patient.(ABSTRACT TRUNCATED AT 250 WORDS)