Background: The financial impact of laparoscopic colectomy remains poorly defined. We report the short-term costs of laparoscopic colectomy (LC) as compared to open colectomy (OC) in a high-volume tertiary care hospital, and are the first to incorporate the costs of colectomy-related complications in an analysis of long-term costs.Methods: A retrospective analysis of 491 sequential patients who underwent colon resection at a tertiary care hospital between January 2004 and December 2006 was performed using an electronic medical record database containing clinical, financial and administrative data. Patients undergoing emergent colectomy or synchronous procedures were excluded. Primary outcome measures were: 1. Total loaded hospital cost of the index admission and 2. Total loaded hospital cost for any subsequent admission for treatment of a colectomy-related incisional hernia or small bowel obstruction with a minimum follow-up of 6 months. Paired t-tests were used for statistical analyses.Results: Two-hundred thirty-nine patients (163 OC, 76 LC) met inclusion criteria. Patient characteristics did not differ between groups. Mean total hospital cost for OC was significantly greater than for LC ($17,581 per patient vs. $14,518, p<0.006). Mean total operative costs were equivalent ($7,451 OC vs. $7,794 LC, p=0.33). Average length of stay was shorter for LC (5 vs. 7 days, p<0.0002). Three cases of LC were converted to OC (3.9%). Observed rates of complications at a minimum follow-up of 6 months were 1.8% (OC) and 2.6% (LC) for incisional hernia, and 3.7% (OC) and 0% (LC) for small bowel obstruction. The average total hospital cost for treatment of incisional hernia and small bowel obstruction was $10,408 and $11,260 per patient, respectively. Integrating the cost of these complications in an intention-to-treat analysis further increased the disparity between the cost of OC ($18,222 per patient, 3.6% increase) as compared to LC ($14,714, 1.4% increase, p<0.003). Conclusion: We demonstrate both short- and long-term financial benefits of LC in a high-volume tertiary care hospital. While shorter lengths of stay likely account for the cost-effectiveness of LC in the short-term, the subsequent costs to treat colectomy-related complications further enhance the cost-effectiveness of LC. We infer that this disparity will likely increase with longer follow-up.