BACKGROUND: Lung cancer is the leading cause of cancer morbidity and mortality. In addition, lung cancer has a significant economic impact on society.OBJECTIVE: To present an economic analysis of the actual care costs of lung cancer which will allow comparison with, and verification of, cost estimates that were developed through modelling and opinion.METHODS: A chart review was conducted of incident cases (circa 1998) of primary bronchogenic lung cancer. Cases were censored at two years from the date of diagnosis. Relevant clinical and health utilization data were collected. Health utilization data included hospital and institutional outpatient (ie, ambulatory clinic) costs. Cost estimates were derived for over 200 specific health services. The present analysis was performed from the economic perspective of the health care institution.RESULTS: A total of 13,389 health service events were captured with an estimated total cost of $8.4 million. Laboratory tests, diagnostic imaging and ambulatory visits constituted 86% of the service events while patient admissions and therapy constituted 76% of the costs. The vast majority of overall costs occurred just before, or within, three months of diagnosis. The median nonsmall cell lung cancer and small cell lung cancer case costs were $10,928 (range $9,234 to $11,047) and $15,350 (range $13,033 to $21,436), respectively.CONCLUSION: The results agree with the literature that the majority of lung cancer case costs are realized around the date of diagnosis (ie, early phase). The present study illustrates Canadian health care system lung cancer case costs based on actual care received versus hypothetical care algorithms.