OBJECTIVES: Characterize hospital expenditures and relationships associated with ulcerative colitis (UC) and enhance awareness of their impact on a large, self-insured employer. METHODS: A retrospective analysis of claims data from 2002 to 2004 for patients with UC (ICD-9 code 556.x) were analyzed from a database of a self-insured employer, consisting of approximately 500,000 employees, retirees, or dependents. Eighteen months of continuous enrollment was required [6-month pre- and 12 months post-index date]. A randomly selected age and gender matched group of non-colitis claimants was the comparator group. A disease severity stratification algorithm classified UC patients into three mutually exclusive cohorts, mild [untreated or treated with aminosalicylates or topical therapy only]; moderate [additional medical therapies (e.g., oral corticosteroids and/or immunomodulators)]; or severe [hospitalized for UC] cohort. RESULTS: Inpatient costs were evaluated for 1,057 UC patients and 4,228 comparators. Total inpatient costs were higher for UC patients than controls ($3,185 vs. $728) and highest for UC patients with severe disease as compared to those with mild and moderate disease ($10,172 vs. $2,028 and $1,849). Inpatient costs comprised 45-46% of total costs for severe UC patients. Hospitalizations were most prevalent among UC patients having no treatment (14.5%) or treated with corticosteroids, whether alone (10.4%) or in combination (15.5%). Treatment that included immunosuppressive, intravenous and/or methotrexate without corticosteroids accounted for fewest hospitalizations (7.8%) apart from those treated only with topical agents (4.8%). CONCLUSION: Inpatient costs were higher for patients with UC than controls, especially those patients with severe disease. Hospitalizations were most prevalent for UC patients not receiving treatment or receiving corticosteroids. Those receiving topical agents only had the lowest prevalence of hospitalization, but were also likely to have more mild disease. Results indicate that treating severe UC with immunosuppressive, intravenous or methotrexate therapy will reduce prevalence of hospitalizations, a key driver to higher costs.