OBJECTIVES: China has over 50% of new hepatocellular carcinoma (HCC) cases in the world. The study estimated the economic burden associated with HCC in Tianjin, China. METHODS: Data were obtained from the Tianjin Urban Employee Basic Medical Insurance (UEBMI) database (2003-2007), including inpatient claims for medical services and prescription drugs for 30% enrollees. Adult patients with ≥ 1 diagnosis of HCC and 6-month continuous enrollment before and after the first HCC diagnosis between 2003 and 2007 were selected. Patient characteristics, healthcare utilization and costs were analyzed. Costs were estimated in 2007 U.S. dollars using the Medical Service Consumer Price Index (CPI) in China and an exchange rate of 7.598 Chinese Yuan to 1 USD in 2007. RESULTS: A total of 857 HCC eligible patients were included in the analysis with a mean age of 62.2 years, 25.0% female and 72.4% retired. Approximately 65.2% of all patients had ≥ 1 comorbidity, 48.4% had cirrhosis, 35.4% had HBV/HCV, 18.1% had esophageal varices, 10.2% had encephalopathy, and 14.4% had diabetes mellitus.  The mean number of hospitalizations during the 6-month study period was 1.62, with 40.0% patients having >1 hospital admissions. About 84.0% hospitalizations occurred in tier-3 hospitals. The mean length of stay (LOS) was 24.6 days per hospitalization and 38.9 days during the 6-month study period. The total 6-month inpatient costs were $4,400 per patient with 70.1% covered by UEBMI and 29.9% by patients. Medication costs accounted for 56.3% of total inpatient costs; the rest was attributed to medical services. Examinations, medical consumables and bed costs accounted for 14.3%, 9.3% and 4.9% of total inpatient costs, respectively. CONCLUSIONS: The majority of Chinese HCC patients receive treatment in tier-3 hospitals. HCC poses substantial economic burden to the payer and patients in China. Medications accounts for more than half of the total inpatient costs.