We examined computerized hospital discharge abstract data from 372,680 major surgery patients admitted to 404 California acute care hospitals in 1988 to identify potential complications of care. At least one potential in-hospital complication occurred for 10.8% of patients. Patients with complications were older and more likely to die in-hospital (9.4% compared to 1.0%, P < 0.0001). On average, patients with complications had longer stays (13.5 versus 5.4 days, p < 0.0001) and higher total charges ($30,896 versus $9,239, p < 0.0001). After adjusting for demographic, clinical, and hospital factors, patients with potential complications averaged $16,023 higher total hospital charges than uncomplicated patients. Complications were associated with 96.6% (95% confidence interval = 95.2%, 98.0%) higher hospital charges after adjusting for these factors. Across all patients, complications were related to over $647 million in additional total hospital charges for these major surgery patients.