Hip fracture is a medical and socioeconomic problem among the 65 years and older population in Japan. Length of hospital stay in Japan is much longer than other developed countries, and the Japanese government has tried to reduce length of stay in order to reduce medical expenditures. The objective of this study was to compare outcomes and costs of health care services for patients with hip fracture surgery among three hospitals with different care systems in Japan. Medical records of patients who were 65 years or older, who had hip fracture surgery within the past 2.5 years were reviewed. A questionnaire was sent to patients and/or their family members to ask patients' health outcomes and approximate costs of care after discharge. Initial hospitalization costs, costs of subsequent transitional care hospital, elders' care services and family's salary loss were estimated and compared among the three hospitals after adjusting for patients' characteristics and treatments. The response rate of the questionnaire was 70% (n=149/211). Patients' outcomes (mortality and ambulatory ability) after discharge were comparable. Hospitals that had shorter lengths of stay reduced costs to themselves, but did not reduce overall costs including care after discharge; however, costs were even higher because patients stayed in subsequent hospitals longer and/or used more elders' care services. Reducing the length of stay in the initial acute care hospitals could be just a method of cost-shifting to subsequent care services and is unlikely to bring an overall cost-savings to the Japanese health care system.