Tracheostomy utilization has dramatically increased recently. Large gaps exist between expected and actual outcomes resulting in significant decisional conflict and regret. We determined 1-year patient outcomes and healthcare utilization following tracheostomy to aid in decision-making and resource allocation. Retrospective cohort study. All California hospital discharges from 2012 to 2013 with follow-up through 2014. Nonsurgical patients who received a tracheostomy for acute respiratory failure. None. Our primary outcome was 30-day, 90-day, and 1-year mortality. We also determined hospitals readmissions rates and healthcare utilization in the first year following tracheostomy. We identified 8,343 tracheostomies during the study period. One-year mortality following tracheostomy was high, 46.5%. Older adults (≥ 65 yr) had significantly higher mortality compared with younger patients (< 65 yr) (54.7% vs 36.5%; p < 0.0001). Median survival for older adults was 175 days (95% CI, 150-202 d) compared with greater than 1 year for younger adults (adjusted hazard ratio, 1.25; 95% CI, 1.14-1.36). Within 1 year of tracheostomy, 60.3% of patients required hospital readmission. Older adults were more likely to be readmitted in the first year after tracheostomy compared with younger adults (66.1% vs 55.2%; adjusted hazard ratio, 1.19; 95% CI, 1.09-1.29). Total short-term acute care hospital costs (index and readmissions) in the first year after tracheostomy were high (mean, $215,369; SD, $160,874). Long-term outcomes following tracheostomy are extremely poor with high mortality, morbidity, and healthcare resource utilization especially among older patients. Some subsets of younger patients may have better outcomes compared with the general tracheostomy population. Short-term acute care costs were extremely high in the first year following tracheostomy. If extended to the entire U.S. population, total short-term acute care hospital costs approach $11 billion dollars per year for tracheostomy-related to acute respiratory failure. These findings may aid families and surrogates in the decision-making process.