Background: Cancellation of surgical procedures creates a financial burden to health providers and patients. It also causes a potential emotional stress and a negative impact on perception of quality of care. It should be a priority to identify risks of surgery cancellations in view of modification to assure timely and efficient delivery of care.

Objective: To identify and estimate costs borne by cancelation of elective surgeries in a general hospital.

Methods: Data were collected from a general hospital of social security organization of Iran. In-patient medical records were reviewed for all patients scheduled for elective surgeries in a period of 1 year, starting from 21^st of March 2011 to 20^th of March 2012. The costing data were collected in 2014. Patients undergoing out-patient surgery and emergency surgical procedures were excluded from the study.

Results: During the study period, 14,687 cases were scheduled to undergo inpatient elective surgical procedures. Of those 274 cases were cancelled, among the cancelled cases, 242 were cancelled during the preparation in the surgery ward and 32 cases were cancelled in operation room. The total cost of surgery cancellation was US$ 92, 049.0. Out of this: US$ 42,668.0 (46.4%) was related to bed expense; 32,363.0$US (35.1%) for direct costs related to resources and supplies; and US$ 16,569 (18.5%) was related to physician visits.

Conclusion: The study demonstrated that cost of surgery cancelation was considerably high in the studied general hospital. More than half of the cost (62.1%) of surgery cancelation was due to avoidable reasons. [ Ethiop. J. Health Dev . 2016;30(2):92-95]