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To determine the attributable cost of ventilator-associated pneumonia from a hospital-based cost perspective, after adjusting for potential confounders.Patients admitted between January 19, 1998, and December 31, 1999, were followed prospectively for the occurrence of ventilator-associated pneumonia. Hospital costs were defined by using the hospital cost accounting database.The medical and surgical intensive care units at a suburban, tertiary care hospital.Patients requiring >24 hrs of mechanical ventilation.None.We measured occurrence of ventilator-associated pneumonia, in-hospital mortality rate, total intensive care unit (ICU) and hospital lengths of stay (LOS), and total hospital cost per patient. Ventilator-associated pneumonia occurred in 127 of 819 patients (15.5%). Compared with uninfected, ventilated patients, patients with ventilator-associated pneumonia had a higher Acute Physiology and Chronic Health Evaluation II score on admission (p < .001) and were more likely to require multiple intubations (p < .001), hemodialysis (p < .001), tracheostomy (p < .001), central venous catheters (p < .001), and corticosteroids (p < .001). Patients with ventilator-associated pneumonia were more likely to be bacteremic during their ICU stay (36 [28%] vs. 22 [3%];p < .001). Patients with ventilator-associated pneumonia had significantly higher unadjusted ICU LOS (26 vs. 4 days;p < .001), hospital LOS (38 vs. 13 days;p < .001), mortality rate (64 [50%] vs. 237 [34%];p < .001), and hospital costs ($70,568 vs. $21,620, p < .001). Multiple linear regression, controlling for other factors that may affect costs, estimated the attributable cost of ventilator-associated pneumonia to be $11,897 (95% confidence interval = $5,265–$26,214;p < .001).Patients with ventilator-associated pneumonia had significantly longer ICU and hospital LOS, with higher crude hospital cost and mortality rate compared with uninfected patients. After we adjusted for underlying severity of illness, the attributable cost of ventilator-associated pneumonia was approximately $11,897.