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Summary: Our study investigated whether pre‐operative screening and treatment for anaemia and suboptimal iron stores in a patient blood management clinic is cost effective. We used outcome data from a retrospective cohort study comparing colorectal surgery patients admitted pre‐ and post‐implementation of a pre‐operative screening programme. We applied propensity score weighting techniques with multivariable regression models to adjust for differences in baseline characteristics between groups. Episode‐level hospitalisation costs were sourced from the health service clinical costing data system; the economic evaluation was conducted from a Western Australia Health System perspective. The primary outcome measure was the incremental cost per unit of red cell transfusion avoided. We compared 441 patients screened in the pre‐operative anaemia programme with 239 patients not screened; of the patients screened, 180 (40.8%) received intravenous iron for anaemia and suboptimal iron stores. The estimated mean cost of screening and treating pre‐operative anaemia was AU$332 (£183; US$231; €204) per screened patient. In the propensity score weighted analysis, screened patients were transfused 52% less red cell units when compared with those not screened (rate ratio = 0.48, 95%CI 0.36–0.63, p < 0.001). The mean difference in total screening, treatment and hospitalisation cost between groups was AU$3776 lower in the group screened (£2080; US$2629; €2325) (95%CI AU$1604–5947, p < 0.001). Screening elective patients pre‐operatively for anaemia and suboptimal iron stores reduced the number of red cell units transfused. It also resulted in lower total costs than not screening patients, thus demonstrating cost effectiveness. [ABSTRACT FROM AUTHOR]