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Background: Inpatient cost for cancer patients is high during the last year of life, but reasons for this are not understood. We aim to understand the type of hospital admissions and inpatient services associated with an increase in inpatient cost in last year of life. Methods: We used survey and billing records of 439 deceased patients with a solid metastatic cancer, enrolled in a prospective cohort study. Based on cost per day of inpatient admissions, we classified admissions as low‐ or high‐intensity. We decomposed the inpatient cost into cost for different inpatient services. We examined the inpatient cost in the last year of life. We also assessed patient characteristics associated with higher inpatient cost in the next 3 months. Results: Towards death, proportion of inpatient cost for "maintenance care" increased while that for intensive care unit (ICU) and surgeries decreased. Low‐intensity, compared to high‐intensity admissions had a higher proportion of cost for "maintenance care" and a lower proportion for surgeries and ICU. Number of low‐intensity admissions increased more steeply towards death than high‐intensity admissions. Both admission types contributed equally to the share of inpatient cost. Older patients were less likely to have a high‐intensity admission (β:‐0.01, CI: −0.02, 0.00). Greater preference for life extension (β: 0.06, CI: 0.01, 0.11) and inaccurate prognostic belief were associated with higher cost of high‐intensity admissions (β: 0.32, CI: 0.03, 0.62). Conclusions: Findings suggest that inpatient costs in last year of life may be reduced if maintenance care is availed in low‐cost settings such as hospice/palliative care alongside steps to reduce non‐beneficial surgeries and ICU admissions. [ABSTRACT FROM AUTHOR]