Pulse oximetry appears to improve quality of care by the early detection of hypoxia noninvasively. We tested the hypothesis that the widespread use of pulse oximetry over a 5-year period in the operating rooms at our institution had resulted in a reduction in blood gas measurements and in departmental operating costs. The total number of blood gas determinations per hour of anesthetic time at our institution decreased by 44%, from 7.64 to 4.26 measurements per 100 operating room hours. The number of capnography units in the operating rooms increased from 8 to 14, the number of pulse oximeters increased from 0 to 22, and oximeter use increased from 0 to 100% for all anesthetics. The total cost to provide oximetry, capnography, and blood gas measurements in 1989–1990 was less than the cost to provide blood gas measurements alone in 1985–1986. The introduction of these technologies was accomplished without an increase in cost: $76,880 in 1985–1986 versus $71,025 in 1989–1990.