OBJECTIVE To evaluate the impact of discontinuation of contact precautions (CP) for methicillin-resistant Staphylococcus aureus (MRSA) and vancomycin-resistant Enterococcus (VRE) and expansion of chlorhexidine gluconate (CHG) use on the health system. DESIGN Retrospective, nonrandomized, observational, quasi-experimental study. SETTING Two California hospitals. PARTICIPANTS Inpatients. METHODS We compared hospital-wide laboratory-identified clinical culture rates (as a marker of healthcare-associated infections) 1 year before and after routine CP for endemic MRSA and VRE were discontinued and CHG bathing was expanded to all units. Culture data from patients and cost data on material utilization were collected. Nursing time spent donning personal protective equipment was assessed and quantified using time-driven activity-based costing. RESULTS Average positive culture rates before and after discontinuing CP were 0.40 and 0.32 cultures/100 admissions for MRSA (P=.09), and 0.48 and 0.40 cultures/100 admissions for VRE (P=.14). When combining isolation gown and CHG costs, the health system saved $643,776 in 1 year. Before the change, 28.5% intensive care unit and 19% medicine/surgery beds were on CP for MRSA/VRE. On the basis of average room entries and donning time, estimated nursing time spent donning personal protective equipment for MRSA/VRE before the change was 45,277 hours/year (estimated cost, $4.6 million). CONCLUSION Discontinuing routine CP for endemic MRSA and VRE did not result in increased rates of MRSA or VRE after 1 year. With cost savings on materials, decreased healthcare worker time, and no concomitant increase in possible infections, elimination of routine CP may add substantial value to inpatient care delivery. Infect Control Hosp Epidemiol 2016;1-8.