OBJECTIVES: Rapid titration of extended-release quetiapine fumarate (quetiapine XR) allows an effective dose to be reached by Day 2 in schizophrenia and bipolar mania, and Day 4 in bipolar depression (versus Day 4 or later with quetiapine immediate release [IR]).  This study evaluates the impact of quetiapine XR on length and cost of hospitalisation in patients with schizophrenia or bipolar disorder, compared with quetiapine IR, using Premier Perspective™ Inpatient Hospital database data. METHODS: Inpatient discharges classified within diagnosis-related group 430 (psychoses), prescribed either quetiapine XR or IR, were identified.  Evaluable patients had an ICD-9 diagnosis of schizophrenia or bipolar disorder (295.0x, 296.0x, 296.1x, 296.4x, 296.5x, 296.6x, 296.7x or 296.8x).  Impact of the XR formulation on length and cost of hospitalisation was assessed using multiple logistic regression (GENMOD procedure), adjusting for patient and hospital characteristics.  The data were not normally distributed, therefore log-transformed data were used. RESULTS: In total, 30,429 discharges between January 1, 2008 and June 30, 2009 were analysed.  GENMOD analyses showed that patients who received quetiapine XR had significantly reduced hospitalisation length (10.7% estimated reduction, p=0.001) and cost (9.5% estimated reduction, p<0.001), compared with patients who received quetiapine IR.  These rates correspond to -1.0 days (10.7% of 9.2 days) and -US$531 (9.5% of US$5588) per patient, based on least squares mean estimations of length and cost of hospitalisation in patients treated with quetiapine IR.  Evaluation of patient sub-populations indicated that the significant reduction in length of hospitalisation for quetiapine XR versus IR was driven mainly by patients with bipolar disorder, whereas the significant reduction in costs was driven mainly by patients with schizophrenia. CONCLUSIONS: Inpatient use of quetiapine XR in patients with schizophrenia or bipolar disorder is associated with significantly reduced length and cost of hospitalisation, possibly due to the faster titration schedule for quetiapine XR versus IR.