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Delirium, or acute confusional state, is a common and serious occurrence among hospitalized older persons. Current estimates suggest that delirium complicates hospital stays for more than 2.3 million older persons each year, involving more than 17.5 million hospital days and accounting for more than $4 billion (1994 dollars) of Medicare expenditures. A 40% reduction was recently reported in the risk for delirium among hospitalized older persons receiving a multicomponent targeted risk factor intervention (MTI) strategy to prevent delirium, compared with subjects receiving usual hospital care. 1 Before recommending that this preventive strategy be implemented in clinical practice, however, the cost implications must be thoroughly examined as well.The present analysis performs net cost evaluations of the MTI for the prevention of delirium among hospitalized patients. Hospital charge and cost-to-charge ratio data are linked to a database of 852 subjects, who were treated with MTI or usual care. Multivariable regression methods were used to help isolate the impact of MTI on hospital costs. These results were then combined with our earlier work on the impact of the MTI on delirium prevention to assess the cost effectiveness of this intervention.The MTI significantly reduced nonintervention costs among subjects at intermediate risk for developing delirium, but not among subjects at high risk. When MTI intervention costs were included, MTI had no significant effect on overall health care costs in the intermediate risk cohort, but raised overall costs in the high risk group.Because the MTI prevented delirium in the intermediate risk group without raising costs, the conclusion reached is that it is a cost effective treatment option for patients at intermediate risk for developing delirium. In contrast, the results suggest that the MTI is not cost effective for subjects at high risk.