The economic advantages of percutaneous dilatational tracheostomies versus open tracheostomies in the operating room have been thoroughly evaluated. We are now reporting our comparison of the costs and charges of percutaneous dilatational tracheostomies with those of open bedside tracheostomies at our institution. The current literature comparing the two open techniques and the percutaneous method of placing tracheostomies was reviewed and the charges and costs for these procedures at our institution were compared. Patients were placed into one of three groups for analysis: open tracheostomies in the operating room (Group I), open tracheostomies in the intensive care unit (Group II), and percutaneous dilatational tracheostomies in the intensive care unit (Group III). Based on our own experience and a literature review it is evident that all three approaches to tracheostomies are safe. Economic analysis showed a savings of $180 in cost per procedure and a $658 savings in charges per procedure for the open method at the bedside when compared with the percutaneous method at the bedside. The professional fee for bronchoscopy was not included in this calculation; including this would lead to greater savings with the open method over the percutaneous method. Open tracheostomy in the operating room increased costs over the bedside procedure by $2194 and increased charges by $2871. For the 150 to 180 tracheostomies done each year at our institution utilization of the open technique at the bedside results in a cost savings of approximately $31,500 and a charge savings of $109,000 compared with the percutaneous dilatational tracheostomy. Both the open bedside and percutaneous dilatational methods are reasonable and safe options. However, the open bedside tracheostomy is a better utilization of resources and is more cost effective, and it is the procedure of choice at our institution.