BACKGROUND: A detailed analysis of practice patterns associated with individual variceal bleeding episodes has not been performed. OBJECTIVES: To characterize the treatment sequence, associated costs of bleeding episodes and how sequencing affects the cost of therapy. METHODS: A retrospective evaluation of electronic databases and medical charts for patients who underwent esophagogastroduodenoscopy at the Portland VA between January 1993 and May 1997 was performed. An episode of care was defined as an index bleed with follow-up to death or six months. RESULTS: All 100 bleeding episodes occurring in 79 patients were initially managed in the emergency room. Diagnostic endoscopy was performed in 38% of episodes, banding endoscopy in 28%, sclerotherapy endoscopy in 32% and banding plus sclerotherapy in 2%. Non-pharmacologic therapies (including sclerotherapy, banding, TIPS, balloon tamponade and surgical shunt) were used exclusively in 52 bleeding episodes. Octreotide was used in 41 episodes and vasopressin was utilized in 7 episodes. Pharmacologic therapy was administered prior to endoscopy in 46% and 29% of episodes for octreotide and vasopressin, respectively. Treatment groups receiving pharmacologic therapies were more expensive ($19,193 ? $1,900 for octreotide and $24,957 ? $9,537 for vasopressin) than the non-pharmacologic therapy group ($13,647 ? $1,471), reflecting patients with more severe bleeds. Episodes of care where octreotide was given prior to endoscopy were shown to have lower overall inpatient costs ($15,653 ? 8,346) than episodes of care where octreotide was given after endoscopy ($22,265 ? 14,180). CONCLUSION: Understanding the costs of various practice patterns for variceal bleeding can help manage the potentially significant economic burden associated with this disease.