OBJECTIVES: This analysis was conducted to examine the principal cost drivers for patient care within the National Outcomes Measurement Study in Schizophrenia, a longitudinal, observational study of the clinical, humanistic, and economic outcomes of Canadian schizophrenia patients. METHODS: To date, 376 patients have been recruited from 32 academic and community sites across Canada. Inpatient (hospitalisations) and outpatient (health professional visits, counseling, legal costs, employment status) resource use (RU) is collected monthly from all patients. Physician-reported RU includes psychiatric medications. Mean costs of care per patient-month were established during the first three months after registration, and regression models measured the predictive power of baseline demographic and clinical parameters. RESULTS: At registration, 67% of the study patients were male, 90% Caucasian, 41±11 y with an average age of onset of psychotic symptoms of 23±7 y and an average duration of symptoms of 17±11 years. Seventy percent had a Clinical Global Impression score of "mild to moderately ill"; 72% had a CGImprovement score of at least "minimally improved" and the mean SOFAS score was 60±13. Based on 364 patients with at least 2 m of RU data, the average total cost was $CDN 3441 per patient-month, ($772: pharmaceuticals, $1430: inpatient care, $1239: outpatient care). Though the overall predictive power of the model was low (R2 = 0.10), the most significant predictors of increased total cost were: CGImpression (p <0.001), SOFAS (p = 0.014), ethnicity (p = 0.001), and onset age (p = 0.080). CONCLUSIONS: Inpatient care represents the largest component (42%) of the total cost of care for patients in this study. Costs are higher for Caucasian patients, patients with later onset of disease, and patients with more severe disease measured by CGImpressions and SOFAS. Whether the use of more effective medications will decrease hospitalization and total costs remains to be determined.