OBJECTIVES: Gram-positive bacteria cause clinically severe peritonitis and exit-site infection (ESI) in patients on peritoneal dialysis (PD). Incident PD patients are most prone to developing ESI and peritonitis within the first year of dialysis. We investigated the potential costs, quality of life, and clinical outcomes of incident PD patients with or without regular application of mupirocin on exit-site from the perspective of healthcare provider in Hong Kong. METHODS: We designed a decision tree to simulate potential outcomes of incident PD patients with and without regular application of mupirocin over a period of one year. Outcome measures included total direct medical cost per patient, quality-adjusted life-years (QALYs) gained and gram-positive bacterial infection-related mortality rate. Model inputs were derived from literature. Sensitivity analyses evaluated the impact of uncertainty in all model variables. RESULTS: In base-case analysis, the mupirocin group showed higher expected QALYs (0.6496 versus 0.6456), lower infection-related mortality rate (0.18% versus 1.64%) and lower total cost per patient (USD258 versus USD1,661) comparing with the control group. Rate of gram-positive bacterial peritonitis without mupirocin and the risk of gram-positive bacterial peritonitis with mupirocin were identified to be potential influential factors. In 10,000 Monte Carlo simulations, mupirocin group was significantly (p<0.001) less costly, gained higher QALYs with lower mortality rate 99.9% of the time. CONCLUSIONS: Daily application of mupirocin at catheter exit-site during the first 12 months of PD seems to be cost-saving and effective in reducing mortality of PD-related gram-positive infections as well as improving health-related quality of life from the perspective of healthcare provider in Hong Kong.