HYPOTHESIS: Medicare health maintenance organizations (HMOs) do not reduce the cost of colon resections in elderly patients. DESIGN: Review of prospectively collected and mandatory reported Florida hospital discharge data from January 1, 1995, through December 31, 1999. We used the chi(2) test for trend analysis to assess significant change in age, mortality, and complications, and the Kruskal-Wallis test to compare inflation-adjusted hospital charges, comorbidity, length of stay, and secondary procedures. SETTING: Administrative database including all community- and university-based surgeons. PATIENTS: All patients 70 years or older who underwent colon resection from 1995 through 1999. MAIN OUTCOME MEASURES: Age, mortality, complications, length of stay, number of comorbidities and secondary procedures, hospital charges, and type of colon resection. RESULTS: The frequency of different colon resections increased by 10% to 30% from 1995 through 1999. Total hospital charges increased during the study period (P<.001), whereas mortality and complications remained unchanged. Length of stay, number of secondary procedures, and comorbidities were the most significant contributors to hospital charges. Despite a significantly shorter hospital stay, Medicare HMO patients had similar hospital charges to those of original Medicare patients. CONCLUSIONS: Colon resections can be undertaken in elderly patients with acceptable morbidity. Per diem charges were higher for patients covered by Medicare HMO, despite their having shorter lengths of stay, fewer comorbidities, and fewer secondary procedures.