As a more consultative but less procedurally oriented specialty, Hepatology has been considered a financial liability in some academic centers. However, no actual data exist on the relative contribution of a Hepatology practice. The purpose of this study was to evaluate the direct and indirect (i.e., downstream effect) charges generated by a Hepatology section in comparison with a Gastroenterology section. Using a computerized database, retrospective cohorts of new outpatient consultations and initial admissions seen by the Hepatology and Gastroenterology sections over a 3-month period were created. The cohorts were followed for 12 months. Charges generated directly to the section (direct charges) and to the hospital system (indirect charges) were calculated. Each cohort consisted of 179 patients. The Hepatology patients generated $5,851,463 in overall charges for the hospital, compared with $2,273,339 for the Gastroenterology cohort. Only 3.6% of the Hepatology charges were direct, compared with 15.9% of the Gastroenterology charges. For every $1 billed by Hepatology, the hospital system generated an additional $26.95 in charges ($51.03 for the orthotopic liver transplantation patients, and $14.26 for the non-orthotopic liver transplantation patients). For every $1 billed by Gastroenterology, the hospital system generated an additional $5.31 in charges. Similar inpatient collection rates were seen between the two groups (27.7% for hepatology and 33.6% for gastroenterology). In conclusion, although Hepatology generates only a small amount of direct charges, it accounts for a very substantial amount of indirect or downstream billing for an academic medical center. This study validates the importance of a hospital's support for a Hepatology section, especially in a center performing orthotopic liver transplantation. (HEPATOLOGY 2005;41:968-975.