OBJECTIVES: To describe patient characteristics and evaluate inpatient utilization and costs among patients with lung cancer in Tianjin, China. METHODS: Retrospective analyses were conducted using Urban Employee Basic Medical Insurance (UEBMI) claims database from Tianjin from 2003 to 2007, which included a 30% random sample of UEBMI enrollees in Tianjin. Patients with >=1 lung cancer diagnosis and continuous eligibility 6 months before and 12 months after the first diagnosis were selected. Inpatient utilization and costs during the 12-month study period were estimated. Costs were valued in 2007 US dollars using the corresponding inflation rate and exchange rate. RESULTS: A total of 2351 lung cancer patients were included with mean age of 66.5 years, 34.9% female, and 86.9% retired. Approximately 50.0% patients had metastasis at the first diagnosis. Among them, 46.9% had cardiovascular disease, 27.6% had COPD, and 23.3% had hypertension. The mean number of admissions was 2.44 during the 12 months, with 53.3% of patients having >=1 admission. About 84.8% hospitalizations occurred in a tier-3 hospital. The mean length of stay was 25.9 and 24.2 days, respectively, for first and subsequent admissions. Anti-neoplastic agents were used in 66.1% hospitalizations. The mean cost per hospitalization was $2473 and $ 2260 for first and subsequent admissions, respectively. The total 12-month inpatient costs were $ 5511 per patient: 70.9% were covered by payers and the rest by patients. Approximately 58.2% of the total inpatients costs were attributed to medication costs. Examinations, medical consumables and bed accounted for 13.4%, 6.3% and 5.0% of the total inpatient costs, respectively.    CONCLUSIONS: The majority of lung cancer patients is metastatic and treated in tier-3 hospitals. Lung cancer poses substantial economic burden to payers and patients. The majority of the costs were attributed to medications.