Hospital costs and length of stay for 86 patients with peripheral vascular disease treated by bypass or percutaneous transluminal angioplasty (PTA) were assessed. The length of stay averaged 4-4.5 times longer, and the total hospital charge was 3-3.7 times greater, for bypass than for PTA. These charges are discussed in relation to current diagnosis-related groups (DRGs) and the allowed reimbursement from the Federal Prospective Payment System. In appropriately selected patients with peripheral vascular disease, PTA should be the treatment of choice from both medical and financial points of view.