Non-adherence with antipsychotic medications has been implicated as a proximal cause of hospital admission in the community treatment of schizophrenia. OBJECTIVE: To estimate the proportions of short-term inpatient admissions and hospital days for schizophrenia in the United States that are attributable to non-adherence with antipsychotic medications and to calculate the corresponding total health care costs of this care. METHODS: A series of multivariate regressions were performed with statewide 2001-2004 California Medicaid (Medi-Cal) data to estimate the fraction of hospital admissions and hospital days for schizophrenia attributable to non-adherence with antipsychotic medications. The 1997 Client/Patient Sample Survey was then used to estimate the national number and length of short-term inpatient admissions for schizophrenia. The 2002 Survey of Mental Health Organizations was used to produce national daily cost estimates of inpatient psychiatric care. The fraction of inpatient short-term admissions attributable to non-adherence was then applied to national estimates of the number and costs of inpatient treatment episodes. RESULTS: Each year in the United States, there are approximately 216,000 short-term inpatient admissions for the treatment of schizophrenia. These admissions include a total of approximately 2.0 million hospital days at a total cost of approximately 1.8 billion dollars. Eliminating non-adherence with antipsychotic medications would lower the number of short-term admissions by approximately 34,300 (15.6%), reduce by approximately 236,000 the number of inpatient treatment days (11.7%), and save approximately 213 million dollars (11.7%) in inpatient care costs. CONLCUSIONS: Non-adherence with antipsychotic medications accounts for a considerable proportion of inpatient treatment costs for schizophrenia. Improving adherence with antipsychotic medications would likely lead to savings by reducing the frequency and duration of inpatient treatment.