This retrospective cohort study aimed to determine the resource utilization and cost consequences of ketorolac tromethamine in postoperative pain management in a variety of clinical circumstances. All patients were treated at LDS Hospital, Salt Lake City, Utah, a 520-bed teaching hospital. A long-term archive of clinical and financial data from a computerized hospital information system was searched for patients with specified primary International Classification of Diseases, 9th Revision, Clinical Modification discharge diagnoses treated from June 1, 1990, to July 1, 1992, who received ketorolac (n = 229). These patients were matched with cohort patients (n = 821) treated from July 1, 1989, to May 31, 1990, who did not receive ketorolac. The archive contained information on ketorolac exposure as well as concurrent drug therapy and adverse drug events that had been prospectively evaluated during hospitalization throughout the study and cohort periods. Detailed costs were available for each patient. The study examined attributable differences in lengths of stay and total costs using linear regression modeling. We found a statistically significant attributable decreased length of stay for ketorolac patients of 1.15 days. Case patients also had reduced usage of narcotic drugs (4.39 fewer doses than cohorts and 15.6 hours shorter duration of narcotics than cohorts), reduced use of antiemetic and antipruritic medications, and reduced numbers of adverse events. Linear regression modeling showed that ketorolac use was significantly related to reduced cost using inflation-adjusted dollars. We believe that ketorolac has significant cost advantages over opiate analgesics because of its narcotic-sparing effects. Advantages of ketorolac use include reduced rates of adverse drug events, reduced lengths of stay, especially for orthopedic surgery, and reduced overall hospital costs for diagnosis-related groups associated with cholecystectomy.