Objectives. Cost containment has become an important issue in medical practice. With the implementation of collaborative care programs and critical pathways, substantial reduction in overall costs can be achieved while maintaining the quality of care and patient satisfaction. Methods. Our series consists of 856 consecutive patients treated with radical retropubic prostatectomy by 24 surgeons in a single hospital between January 1, 1994, and January 31, 1997. A clinical pathway for radical retropubic prostatectomy was implemented July 1, 1994. The patients were subdivided into three groups: (1) baseline: patients who underwent surgery in the 6 months immediately before the pathway onset (n = 113); (2) nonpathway: 75 patients treated off the clinical pathway; and (3) pathway: 668 men placed on the clinical pathway. We compare average length of stay and average hospital charges among the three groups. We also compare average length of stay among physician volume groups: high volume physicians performed at least 12 operations per year; low volume physicians performed less than 12 operations per year. Charges were further broken down by department. Patient satisfaction was recorded by an outside source after discharge. Postoperative complications were assessed in the clinical pathway and nonpathway groups. Results. Average hospital charges and average length of stay were $12,926 and 5.8 days for baseline patients, $11,795 and 5.0 days for nonpathway patients, and $10,042 and 4.0 days for pathway patients, respectively. Implementation of the clinical pathway was associated with lower charges and length of stay in the pathway group as well as the nonpathway group, with larger reductions in pathway patients. With continuous reassessment and modification of the clinical pathway, both average hospital charges and average length of stay have progressively decreased from $10,540 and 4.9 days in 1994 to $8766 and 2.7 days in January 1997. Charges were uniformly reduced in radiology, laboratory, pharmacy, operating room, anesthesia, and nursing or routine care. Patient satisfaction was similar in the pathway group and the nonpathway group. Incidence of postoperative complications did not differ significantly between the pathway and nonpathway groups. Length of stay and hospital charges were significantly lower for high than low volume surgeons, irrespective of the declines observed over time (P = 0.0001 and 0.0001, respectively). Conclusions. Average hospital charges and average length of stay for all surgeons were lowered significantly with the implementation of a clinical pathway and continue to decrease with continuous reassessment. The pathway was not associated with any increase in postoperative complications or patient dissatisfaction. Surgeons who operate frequently have lower average lengths of stay and hospital charges than those who operate infrequently.