OBJECTIVES: The specific aims of this study were to develop a demographic description of a sample of patients presenting with bleeding esophageal varices and determine the direct health care costs of variceal bleeding. METHODS: This was a retrospective evaluation of patients who underwent esophagogastroduodenoscopy at the Portland VA Medical Center between January 1993 and May 1997. Data sources included both electronic databases and patient medical charts. The primary unit of analysis was an episode of care, defined as an index bleed plus 6 months of follow-up or death, whichever came first. RESULTS: The total inpatient direct cost was $1,566,904 and outpatient direct cost was $104,611, for a total of $1,671,515 for 100 bleeding episodes in 79 patients. Episodes of care for patients receiving ≤2 units of packed red blood cells were approximately a third as costly as those receiving >2 units of packed red blood cells (n = 17, $6,470 and n = 83, $17,553). The difference in costs was statistically significant (p < 0.05), and primarily attributable to hospital bed costs. CONCLUSIONS: There is a substantial financial burden associated with this illness, primarily attributable to inpatient costs. In addition to severity of bleeding, Child's class, endoscopic findings, and the timing of pharmacological therapy seem to influence the overall cost of managing esophageal varices. (C) 2000 by Am. Coll. of Gastroenterology.