Kidney transplantation is the most cost-effective treatment modality for end-stage renal disease (ESRD). Nonetheless, in keeping with the managed care mandate, expense has become an increasingly significant issue. Over $11 billion is now spent each year on ESRD treatment. Medicare per capita annual payments exceed $36,000 per beneficiary. Transplant procedure charges and outcomes vary dramatically across the United States. The average charge for a kidney transplant is approximately $82,000. Graft and patient survival rates are highly variable, even among the most active programs in the US. Individual transplant programs must implement approaches to contain their costs and assure quality. At the Mayo Clinic, our mean charge for a kidney transplant ($53,510) in 1996 was 27.2% below expected, given national medical inflation over the past decade. Unfortunately, the net operating income associated with our kidney transplant program has been severely eroded in an increasingly brutal economic environment.