OBJECTIVE: The purpose of this study was to estimate the payer costs of pancreatic cancer for a nonelderly Medicaid population and to provide a breakdown of costs by type of care. METHODS: We performed a retrospective analysis of California Medicaid (Medi-Cal) data linked by encrypted social security number to the California Department of Health Services Vital Statistics database. We limited the sample to patients who were continuously enrolled in Medi-Cal from six months prior to their first pancreatic cancer diagnosis through death or through December 31, 1998, whichever occurred first. Patients must have had at least two diagnoses of pancreatic cancer or one diagnosis and a cause of death of pancreatic cancer. We excluded elderly patients (?65 years) because most of their medical bills are paid by Medicare not Medicaid, which is a limitation in these data. We estimated costs using the Kaplan-Meier Sample Average, which results in consistent cost estimates if the censoring mechanism is independent of survival and cost, a condition that is satisfied in the present analysis. All cost estimates were expressed in 1999 U.S. dollars. RESULTS: Of 410 Medi-Cal patients meeting the study inclusion criteria, the mean cost per patient for all services was $19,191. The mean inpatient facility cost (including inpatient chemotherapy) was $11,435 (59.6% of total costs) and the mean cost of outpatient clinic visits was $2,416 (12.6% of total costs). The mean cost of hospital outpatient visits and hospice care was $828 (4.3% of total costs) and $1,096 (5.7% of total costs), respectively. The mean cost of outpatient chemotherapy agents was just $178 (0.9% of total costs). Only 105 patients (25.6% of our sample) received outpatient chemotherapy. CONCLUSION: This analysis presents estimates of the payer cost of pancreatic cancer among nonelderly Medi-Cal patients. Similar examination of costs among elderly patients is warranted.