In view of the planned introduction of the DRG system in Germany, this paper gives the reader a guideline on how to analyse costs and productivity of medical procedures. Total knee replacement was chosen because it is one of the standard operations in orthopedic surgery with existing special calculations for this type of operation. By using the example of a total knee replacement, productivity phases are used and their costs are estimated. With these phases the clinician is able to analyse the efficiency of his department and a benchmarking is possible. Nevertheless, we should not forget that although cost reduction in hospitals is essential the patients' health is the main aim of treatment.