Purpose: The purpose of this study was to show the differences of medical cost between hospice and non-hospice care for terminally ill patients. This information provides basic data to nationally institutionalize hospice care for decreasing costs and enhancing quality of life for terminally ill patients. Methods: Participants of this study were 114 terminally ill cancer patients who were diagnosed and died with stomach cancer and lung cancer at the K hospital of the C university. The study was a retrospective survey design that analyzed the medical costs for two weeks before they died. The cost analysis was done according to 11 items form the medical cost bill. Results: Patients enrolled in hospice care had significantly lower medical costs (53%) than did non-hospice patients especially in use of TPN, narcotic analgesics, nursing care, radiology tests, and blood tests. Among patients enrolled/admitted in the hospice unit, there was a significant cost difference only in use of analgesics whether the hospice specialized doctor was in charge of care or not. The cost was significantly lower when a hospice specialized doctor was in charge of care although the total medical cost was the same. Conclusion: This study identified lower medical costs for patients cared for in the hospice unit. Thus, we urge institutionalizing hospice care without delay to insure cost benefits as well as quality care.