A clinical pathway for gastric bypass surgery (GBS) implemented at our institution in 1999 resulted in reduced costs and decreased variability in patient care. However, a reanalysis of GBS hospital costs identified a 16% incidence of "cost outliers". We hypothesized that analysis of clinical variables would identify factors associated with increased hospital costs following GBS. Medical records and financial data for 91 GBS patients from November 2000 to July 2001 were reviewed. Patients with costs >1 SD above the total hospital cost mean comprised the cost outlier (CO) group, while the remaining patients were considered the normal cost (NC) group. Potential etiologies for COs included patient demographics, the number and severity of medical co-morbidities, surgical factors, and major postoperative complications. There were 15 patients in the CO group, and 76 patients in the NC group. Patient demographics were similar in both groups. Diabetes mellitus and severe medical co-morbidities, especially sleep apnea and degenerative joint disease were more common in the CO group (60% vs 9.2%, P < 0.05 vs NC). The incidence of major complications (33% vs 8%) was significantly increased in the CO group (P < 0.05 vs NC). Despite utilization of a clinical pathway for GBS, 16% of patients were "cost outliers". Factors associated with increased hospital costs after GBS included severe medical co-morbidities (especially diabetes mellitus and sleep apnea) and the occurrence of major postoperative complications. Prospective identification of "high risk" GBS patients may allow hospitals with bariatric surgery programs to modify perioperative care and eliminate potential cost outliers.