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Background The rapid and widespread introduction of minimal access surgery has major implications for the National Health Service. It cannot be assumed that replacing an open procedure with a minimal access alternative will be cost-effective. Laparoscopic inguinal hernia repair is a procedure for which the potential economic benefits are particularly unclear. It is currently being adopted in many centres, although limited evidence on its clinical and cost-effectiveness exists. Methods This economic comparison of laparoscopic versus open hernia repair was undertaken on data collected on 104 patients undergoing surgery on a day case basis, in the context of a randomized controlled trial. Results The mean total health service cost of laparoscopic repair was £1074 versus £489 for open repair [mean difference in total health service costs £583; 95 per cent confidence interval (Cl) £265–£904]. This difference was largely accounted for by the difference in theatre costs. laparoscopic repair remained significantly more expensive for most but not all of the scenarios explored in the sensitivity analysis. The direction of the cost-effectiveness ratio was not sensitive to assumptions about long-term recurrence. Neither was it sensitive to halving the operating time in the laparoscopic arm of the trial. When both operating time and the costs of consumables were reduced, laparoscopic repair remained more expensive, but results for this scenario did not achieve statistical significance on this sample size. Conclusions Laparoscopic hernia repair appears an expensive option in most plausible situations. Furthermore, many uncertainties still exist about long-term outcome after the procedure and about the conditions necessary to maximize cost-effectiveness. Large-scale randomized studies to evaluate laparoscopic hernia repair are currently under way to address these issues. We suggest that further evidence is awaited before this technology is further diffused. [ABSTRACT FROM PUBLISHER]