This study examined whether there is a relationship between coded diseases at the time of hospital discharge and costs of hospital re-admission. We carried out a systematic review of data relating to emergency medical patients admitted to St. James' Hospital in Dublin between 1 January 2002 and 31 October 2004. Data on discharges from hospital were analyzed as recorded in the hospital in-patient enquiry (HIPE) system. Of 15,876 episodes recorded among 11,201 patients admitted the number of re-admissions numbered up to 43. Age, year of admission, and frequency of admission were factors associated with increased hospital costs. HIPE coding at first discharge predicted increased costs: codes related to heart failure, pneumonia, stroke, diabetes, malignancy, psychiatric, and anaemia-related codes. Clinical coding using the HIPE database thus strongly predicted hospital costs.