There is controversy over the impact of electronic health record (EHR) systems on cost of care and safety. The authors studied the effects of an inpatient EHR system with computerized provider order entry on selected measures of cost of care and safety. Laboratory tests per week per hospitalization decreased from 13.9 to 11.4 (18%; p < 0.001). Radiology examinations per hospitalization decreased from 2.06 to 1.93 (6.3%; p < 0.009). Monthly transcription costs declined from $74,596 to $18,938 (74.6%; p < 0.001). Reams of copy paper ordered per month decreased from 1668 to 1224 (26.6%; p < 0.001). Medication errors per 1000 hospital days decreased from 17.9 to 15.4 (14.0%; p < 0.030), while near misses per 1000 hospital days increased from 9.0 to 12.5 (38.9%; p < 0.037), and the percentage of medication events that were medication errors decreased from 66.5% to 55.2% (p < 0.007). In this manuscript, we demonstrate that the implementation of an inpatient EHR with computerized provider order entry can result in rapid improvement in measures of cost of care and safety.