OBJECTIVE: To evaluate the direct medical cost in the management of rheumatoid arthritis (RA) as well as the extent of resource use in current practice from the perspective of public health organization in Hong Kong. METHODS: This study was a retrospective design. Subjects recruited must have RA diagnosed and attended the follow-up visits, receiving RA treatment in the Prince of Wales Hospital (PWH) between the period of 1st January 2002 to December 31, 2002. Data was collected by medical chart review. The direct medical costs included inpatient care, outpatient visits, laboratory monitoring, radiological procedure, drug cost and side effects management. RESULTS: A total of 147 patients were included in our study. The average age and the duration of disease of our subjects were 54.7 years old (SD: 10.9) and 12.6 year (SD: 7.0) respectively. The annual direct medical cost per each RA patient was HK$18,657 (US $ 1 = HK $ 7.8). The inpatient care contributed 43.8% of the total, which was the highest. The cost for laboratory monitoring was the second (19.2%) where the outpatient cost ranked the third (15.4%). The cost for RA-related drugs accounted for 9.8%. The cost for the management of the side effects shared 3.1% of the total. Based on a local epidemiological study, the RA prevalence rate was 0.3%. The annual direct medical cost for the management of RA in Hong Kong would be HK$443 million, which shared 1.4% of the total healthcare budget in 2002. CONCLUSIONS: This study demonstrated that RA was a significant economic burden to the healthcare budget of Hong Kong.