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BACKGROUND: New diagnostic tools and emerging medications have significantly changed the existing medical treatment options for lung cancer over the last 5 years. However, the increase in healthcare costs in all developed societies has put the more economical treatments on centre stage. OBJECTIVE: To examine the patterns and costs of lung cancer management at a Swiss University hospital at which there is a focus on interdisciplinary treatment. PATIENTS AND METHODS: All patients encountered during 1998 at the University Hospital of Zurich (USZ) with any diagnosis of lung cancer were selected for this retrospective study. Medical and sociodemographic data were collected by medical chart review for a period beginning with the first contact and ending with the last follow-up examination up to 30 months afterwards. Costs were calculated by assessing all resources used by each patient, multiplied by a uniform average cost factor. Results are in euros at 1999 prices. RESULTS: The sample included 118 patients (72% male) with a mean age of 64.2 years (SD 9.8, range 34-85 years) and a mean smoking history of 45 pack-years (SD 31.8, range 0-13 pack-years). Eighty-nine percent of all patients showed histology of non-small cell lung cancer (NSCLC), whereas 11% showed small cell lung cancer (SCLC). Of the NSCLC patients, 27% were classified as stage I, 14% as stage II, 19% as stage IIIA, 11% as stage IIIB and 26% as stage IV disease. The overall survival rate after 1 year was 55% and after 2 years was 29%. Gender and health insurance status were not associated with overall survival. The median length of hospitalisation during the first year of treatment was 14 days (range 0-112 days). For the entire patient sample, the mean cost per patient was 19,408 euros (median 14,691 euros, range 1821-80,020 euros), 71% of which was due to the hospitalisation costs. The mean cost per NSCLC patient was 19,212 euros (median 14,511 euros, range 1821-80,020 euros) and for SCLC patients it was 20,992 euros (median 15,367 euros, range 5282-51,840 euros). CONCLUSION: This is the first study attempting to estimate the hospital cost of treatment for lung cancer patients in Switzerland and central Europe. The major part of the total cost was due to hospitalisation costs. Patients with advanced stages of lung cancer show the highest cost, mainly due to the costs of chemotherapy. We found that the distribution of total cost is asymmetric: a small number of patients with an excessively long hospital stay cause very high costs.