While delirium has been increasingly recognized as a serious and potentially preventable condition, its long-term implications are not well understood. This study determined the total 1-year health care costs associated with delirium. Hospitalized patients aged 70 years and older who participated in a previous controlled clinical trial of a delirium prevention intervention at an academic medical center between 1995 and 1998 were followed up for 1 year after discharge. Total inflation-adjusted health care costs, calculated as either reimbursed amounts or hospital charges converted to costs, were computed by means of data from Medicare administrative files, hospital billing records, and the Connecticut Long-term Care Registry. Regression models were used to determine costs associated with delirium after adjusting for patient sociodemographic and clinical characteristics. During the index hospitalization, 109 patients (13.0%) developed delirium while 732 did not. Patients with delirium had significantly higher unadjusted health care costs and survived fewer days. After adjusting for pertinent demographic and clinical characteristics, average costs per day survived among patients with delirium were more than 2(1/2) times the costs among patients without delirium. Total cost estimates attributable to delirium ranged from $16 303 to $64 421 per patient, implying that the national burden of delirium on the health care system ranges from $38 billion to $152 billion each year. The economic impact of delirium is substantial, rivaling the health care costs of falls and diabetes mellitus. These results highlight the need for increased efforts to mitigate this clinically significant and costly disorder.