OBJECTIVES: Surgery is common after a hip fracture.  Two surgical options are arthoplasty (AR) (i.e., hip replacement) or internal fixation (IF) (i.e., fixing the patient’s hip).  Previous research suggests that AR is less costly than IF because IF failure rate is high.   This retrospective cohort study compared medical costs between IF and AR in patients with hip fractures of the femoral neck in a large US population. METHODS: Patients ≥50 years with IF or AR performed within 7 days of a hip femoral  neck fracture occurring between 7/1/2002 and 1/31/2010 were identified from the Marketscan database. Details on the specific location of the fracture line within the femoral neck were not available. All patients had continuous insurance coverage for 6 months prior to (pre-period) and 60 days following (post-period) the surgery date (index date). Patients were followed from surgery date up to 18 months or until death, end of continuous enrollment, or end of study period (3/31/2010), whichever came first. Generalized linear models on costs were used to adjust different patient demographic and clinical characteristics. RESULTS: A total of 41,789 patients (mean age 80 years) were identified (60% IF and 40% AR patients). Post-period mean monthly costs were similar between the two cohorts ($4344 for IF vs. $4401 for AR, p=0.339). Costs were the highest in the first month when the surgery occurred and the IF cohort had lower cost than the AR cohort ($22,707 vs. $25,646, p<0.001). No statistically significant differences were found in the multivariate adjusted total mean monthly costs. The AR cohort had slightly higher inpatient costs ($2642 for AR vs. $2469 for IF, p<0.001) but lower outpatient costs ($1463 for AR vs. $1653 for IF, p<0.001). CONCLUSIONS: In this large population, both IF and AR interventions result in significant and similar health care costs.