In this study we describe medical cost estimates for the two major types of inflammatory bowel disease, Crohn's disease and ulcerative colitis, using a literature-based medical decision algorithm costing methodology. Surgery and inpatient costs were estimated to account for roughly half of inflammatory bowel disease medical costs. Outpatient medical care represented only 3.0-7.1% of average cost of medical care for inflammatory bowel disease; initial diagnostic workups were only 1.5-7.8% of medical costs. Long-term complications were estimated to average $439 for ulcerative colitis, nearly twice the average for Crohn's disease. Medications averaged about 10% of total costs. The average annual medical cost per patient with Crohn's disease was estimated at $6,561 (1990 U.S. dollars). The total annual medical costs for U.S. Crohn's disease patients in 1990 was estimated at $1.0-1.2 billion. The average annual medical cost per patient with ulcerative colitis was estimated at $1,488. The total annual medical costs for U.S. patients with ulcerative colitis in 1990 was estimated at $0.4-0.6 billion.