The DRG payment scheme is causing hospitals to examine the financial consequences of treating various patient populations. The purpose of this study was to examine resource utilization for hospitalized neurology patients treated during a 2-year period at an academic medical center. All patients (N = 1,993) were stratified by payor (Medicare, Medicaid, Blue Cross, and other) and age (0-35 years, 35-65 years, and 65 years and above). Mean hospital cost per patient (exclusive of MD fees) for each payor generally rose with age. Patients 35 years of age and over consumed a disproportionately larger share of resources than younger patients. DRG payment under an all payor system would have produced a substantial deficit for this group of patients. The mean hospital length of stay, number of diagnoses per patient, and mortality, as well as percent of admission through the emergency department generally rose with age. This study demonstrated that neurology patients 35 years of age and older generated higher resource utilization than their younger counterparts and were underpaid by the current DRG reimbursement. In this study, DRG payment appeared to provide significant financial disincentives to treat older neurology patients. If our findings are widespread, the quality of neurologic care and the elderly's access to it could become limited in the future.