OBJECTIVE To determine the costs of a change in permanent pacemaker implantation policy to later implantation (day 21+) after cardiac transplantation. METHODS Retrospective review of patient records including duration of temporary pacing, timed of permanent pacemaker implantation, and length of hospital stay for every patient surviving > or = 14 days from November 1990 to August 1995 (period 2) and for all patients in whom permanent pacemakers were implanted between May 1985 and November 1990 (period 1). METHODS Supra-regional cardiopulmonary transplant unit. METHODS 335 consecutive adult cardiac transplant recipients at Freeman Hospital between May 1985 and August 1995. METHODS The cost of the policy change was calculated by subtraction of the overall saving in pacemaker implantations from the overall cost of the extra inpatient stay in period 2 due to delayed implantation. RESULTS Mean inpatient stay per patient following cardiac transplantation of permanent pacemaker recipients in period 1 was 13.8 days compared with 23.9 days in period 2 (P < 0.001). The cost of this extended hospital stay is 60,095 pounds. Had the implantation policy not been changed, a further seven patients would have received a permanent pacemaker in period 2. A saving in pacemaker hardware of 16,275 pounds was made. Overall, however, the new permanent pacemaker implantation policy increased expenditure by 43,820 pounds, assuming that permanent pacemaker implantation was the only reason for the extended hospital stay. CONCLUSIONS The change in policy from early to later permanent pacemaker implantation has markedly increased expenditure.