Background: Postoperative stays after coronary artery bypass graft surgery (CABG) decreased substantially in the 1990s. Although shorter stays offer clinical benefits, premature discharge could increase adverse events and offset initial savings. This study examined the effect of early discharge after CABG on readmission/death and cost within 60 days of discharge home. Variability in hospitals' tendencies for early discharge and adverse outcomes was also explored. Methods: Analyses were based on clinical and claims data for 55,889 New York CABG patients discharged home 1995 to 1998. Early discharge was defined as a postoperative stay below the 15th percentile for patients with similar risk. The likelihood of early discharge and its effect on readmission/death were examined using hierarchical logistic regression, accounting for patient risk and within-hospital correlation. The correlation between early discharge and adverse outcomes at the hospital level was assessed. The effect of early discharge on subsequent inpatient, outpatient, skilled nursing, and home health costs was examined in the Medicare subset. Results: Overall, 17% of patients were discharged early, with increasing prevalence over time. The tendency to discharge early varied widely among hospitals (2% to 42% of patients). We found no association between hospitals' tendencies for early discharge and adverse outcomes. Lower postdischarge costs among patients discharged early (mean = $3,491 versus $5,246 for typical stays) resulted in average cumulative savings of $6,309. Conclusions: Patients selected for earlier discharge after CABG did not have increased adverse event rates or higher costs. Variation among hospitals in early discharge suggests that more efficient patient management could be achieved at some hospitals. © 2007 The Society of Thoracic Surgeons.