Surgical treatment of gastroesophageal reflux disease is increasingly recognized as a cost-effective alternative to long-term medical therapy. This fact, coupled with the advent of laparoscopic fundoplication as a safe and efficacious alternative to open surgery, underscores the importance of determining the costs associated with laparoscopic treatment. Hospital costs and charges of patients undergoing open (N = 9) and laparoscopic (N = 11) fundoplication were retrospectively analyzed. Both procedures were performed during the same time period (6/91-6/93), at the same hospital, and by the same surgical team. Operative time, and hospital stay, were recorded in addition to total, operating room, anesthesia, sterile supplies, and hospital room charges. Figures are reported as mean values +/- standard error of the mean. The Wilcoxon signed rank test was used for comparison of groups. Operative time (221 +/- 18 vs 165 +/- 12 min, P = 0.033) was longer in the laparoscopic group, while hospital stay (5.8 +/- 02 vs 8.8 +/- 04 days, P < 0.001) was significantly shorter. Total hospital costs were similar for both groups of patients ($14,615 +/- 863 vs $15,891 +/- 921, P = 0.247). Overall hospital charges were nearly identical ($26,634 +/- 1376 vs $27,189 +/- 1753, P = 0.803). A detailed analysis demonstrated cost shifting, with laparoscopic fundoplication resulting in significantly higher charges associated with events in the operating room. Operating room ($6,064 +/- 252 vs $4,283 +/- 380, P = 0.001), sterile supplies ($6,214 +/- 508 vs $5,403 +/- 390), and anesthesia charges ($1,593 +/- 76 vs $1,122 +/- 95, P < 0.001) were all greater in the laparoscopic group.(ABSTRACT TRUNCATED AT 250 WORDS)