BACKGROUND CONTEXT: Recent studies have shown that prophylactic use of intrawound vancomycin in posterior instrumented spine surgery substantially decreases the incidence of wound infections requiring repeat surgery. Significant cost savings are thought to be associated with the use of vancomycin in this setting. PURPOSE: To elucidate cost savings associated with the use of intrawound vancomycin in posterior spinal surgeries using a budget-impact model. STUDY DESIGN: Retrospective cohort study. PATIENT SAMPLE: Data from a cohort of 303 patients who underwent spinal surgery (instrumented and noninstrumented) over 2 years were analyzed; 96 of these patients received prophylactic intrawound vancomycin powder in addition to normal intravenous (IV) antibiotic prophylaxis, and 207 received just routine IV antibiotic prophylaxis. Patients requiring repeat surgical procedures for infection were identified, and the costs of these additional procedures were elucidated. OUTCOME MEASURE: Cost associated with the additional procedure to remediate infection in the absence of vancomycin prophylaxis. METHODS: We retrospectively reviewed the cost of return procedures for treatment of surgical site infection (SSI). The total reimbursement received by the health care facility was used to model the costs associated with repeat surgery, and this cost was compared with the cost of a single local application of vancomycin costing about $12. RESULTS: Of the 96 patients in the treatment group, the return-to-surgery rate for SSI was 0. In the group without vancomycin, seven patients required a total of 14 procedures. The mean cost per episode of surgery, based on the reimbursement, the health care facility received was $40,992 (range, $14,459-$114,763). A total of $573,897 was spent on 3% of the 207-patient cohort that did not receive intrawound vancomycin, whereas a total of $1,152 ($12x96 patients) was spent on the cohort treated with vancomycin. CONCLUSIONS: This study shows a reduction in SSIs requiring a return-to-surgery-with large cost savings-with use of intrawound vancomycin powder. In our study population, the cost savings totaled more than half a million dollars.