Abstract INTRODUCTION Previous research has indicated that interhospital competition influences hospital resource utilization. However, the impact of competition on neurosurgical expenditures has not been characterized. METHODS We identified all admissions for cranial neurosurgery in the National Inpatient Sample database from 2006 to 2009 using corresponding DRG codes. The 2 chosen years contain data on the Herfindahl–Hirschman Index (HHI), a validated measure of hospital market competition ranging from 0 (significant competition) to 1 (monopolization). We converted hospital charges to costs using hospital-specific all-payer inpatient cost-to-charge ratios from supplementary files analyzing hospital accounting reports. We assessed how HHI was associated with neurosurgical charges and costs using multivariate linear regression to adjust for 15 confounding variables: patient demographics (age, sex, race, insurance, and household income), severity measures (severity of illness and risk of mortality scores, number of procedures, and comorbidities), hospital characteristics (bedsize, location/teaching status, ownership, region, and area wage index), and length of stay. RESULTS There were 513 271 neurosurgical admissions in 2006 and 2009. The median HHI for hospitals was 0.275 (range = 0.099-0.724). Average inflation-adjusted neurosurgical charges ($62, 098-$77, 812, P < .001) and costs ($21, 385-$22, 389, P < .001) both rose from 2006 to 2009. Increased interhospital competition was associated with greater neurosurgical charges (+ $3,283 for −0.10 HHI, P = .04). Patients in more competitive hospital markets incurred higher charges for cerebrovascular (+ $2,916 for −0.10 HHI, P = .02), ventriculostomy (+ $5,272 for -0.10 HHI, P = .03), and functional operations (+ $9,871 for −0.10 HHI, P = .04) specifically, but not tumor or neurotrauma surgery (both P > .05). However, interhospital competition was not significantly associated with neurosurgical costs. CONCLUSION Greater interhospital competition was associated with elevated charges for neurosurgery, but not costs. These disparate findings may be due to economic factors reflected only in charges like marketing expenses, unpaid patient bills, and institutional reimbursement rates. Amidst ongoing practice consolidation and reimbursement reform, future research should characterize the mechanisms by which competition may affect neurosurgical expenditures.