Purpose: We assessed changes in hospital costs and resource use among patients undergoing radical prostatectomy following implementation of a clinical care path. Materials and Methods: A standardized clinical care path for patient management before and after radical prostatectomy was developed and implemented at a large academic medical center in California. All 577 consecutive patients undergoing radical prostatectomy during the 3 years before and 1 year after implementation of the care path were included in the study. Each patient was entered prospectively into a hospital-wide financial data base, which served as the source for observations on hospital costs, hospital charges and length of stay. Results: After implementation of the radical prostatectomy care path hospital costs decreased by 12% ($7,916 versus $6,934, p <0.0001), hospital charges decreased by 20% ($17,005 versus $13,524, p <0.0001) and length of stay decreased by 28% (5 versus 3.6 days, p <0.0001). Decreases were noted in all categories of the hospital patient financial profile, except operating room charges. Conclusions: By standardizing preoperative and postoperative management for patients undergoing radical prostatectomy, significant savings can be achieved over and above existing trends toward shorter hospital stays and lower hospital costs.