Vagus nerve stimulation (VNS) therapy is an established method for treating patients with refractory seizures. Although the initial cost of the device is about 10,000 US dollars, the battery life of the model 100 implanted in the patients in this analysis can exceed 5 years at standard settings. It is important to understand what type of cost-benefit can be expected after implantation. Our aim was to assess unplanned hospital costs 18 months before and 18 months after VNS implantation in 43 patients. The VNS therapy system was implanted according to standard procedures and stimulation of 0.75 to 2.0 mA was delivered either as 30 seconds on and 5 minutes off or 7 seconds on and 14 seconds off. Seizure frequency was calculated before and after 18 months of treatment. During this time no changes were made with other therapies for epilepsy. Hospitalization for emergency room (ER) visits, ward stays, and intensive care days were calculated according to the costs at Sahlgrenska University Hospital in Sweden. Therapy response was defined as 25% or greater reduction in seizure frequency. For all patients, intensive care unit (ICU) costs were reduced from 46,875 to 0 US dollars, ER visits from 13,000 to 9,000 US dollars, and ward stays from 151,125 to 21,375 US dollars. Total hospital costs for the 43 patients studied before VNS therapy were 211,000 US dollars and after 18 months of treatment were reduced to 30,375 US dollars, an average annual cost savings of approximately 3,000 US dollars per patient. The cost savings applied to all patients, irrespective of whether they responded to VNS therapy. VNS therapy resulted in annual reductions of approximately 3000 US dollars in unplanned hospital costs per study patient. Such direct savings sustained over the battery life of the VNS therapy system can equal or exceed the purchase price of the device.