Between 1978 and 1997 all newborns in the Austrian province of Tyrol were reviewed regarding hip dysplasia and related surgery. This involved a mean of 8257 births per year (7766 to 8858). Two observation periods were determined: 1978 to 1982 (clinical examination alone) and 1993 to 1997 (clinical examination and universal ultrasound screening). A retrospective analysis compared the number and cost of interventions due to hip dysplasia in three patient age groups: A, 0 to < 1.5 years; B, ≥ 1.5 to < 15 years; and C, ≥ 15 to < 35 years. In group A, there was a decrease in hip reductions from a mean of 25.2 (SD 2.8) to 7.0 (SD 1.4) cases per year. In group B, operative procedures decreased from a mean of 17.8 (SD 3.5) to 2.6 (SD 1.3) per year. There was a 75.9% decrease in the total number of interventions for groups A and B. An increase of €57,000 in the overall cost per year for the second period (1993 to 1997) was seen, mainly due to the screening programme. However, there was a marked reduction in costs of all surgical and non-surgical treatments for dysplastic hips from €410,000 (1978 to 1982) to €117,000 (1993 to 1997). We believe the small proportional increase in costs of the universal ultrasound screening programme is justifiable as it was associated with a reduction in the number of non-surgical and surgical interventions. We therefore recommend universal hip ultrasound screening for neonates.