Background: This study centered on differences in medical costs, using the Taiwan diagnosis-related groups (Tw-DRGs) on medical resource utilization in inguinal hernia repair (IHR) in hospitals with different ownership to provide suitable reference information for hospital administrators. Methods: The 2010-2011 data for three hospitals under different ownership were extracted from the Taiwan National Health Insurance claims database. A retrospective method was applied to analyze the age, sex, length of stay, diagnosis and surgical procedure code, and the change in financial risk of medical costs in IHR cases after introduction of Tw-DRGs. The study calculated the cost using Tw-DRG payment principles, and compared it with estimated inpatient medical costs calculated using the fee-for-service policy. Results: There were 723 IHR cases satisfying the Tw-DRGs criteria. Cost control in the medical care corporation hospital (US$764.2/case) was more efficient than that in the public hospital (US$902.7/case) or nonprofit proprietary hospital (US$817.1/case) surveyed in this study. For IHR, anesthesiologists in the public hospital preferred to use general anesthesia (86%), while those in the two other hospitals tended to administer spinal anesthesia. We also discovered the difference in anesthesia cost was high, at US$80.2/case on average. Conclusions: Because the Tw-DRG-based reimbursement system produces varying hospital costs, hospital administrators should establish a financial risk assessment system as early as possible to improve healthcare quality and financial management efficiency. This would then benefit the hospital, patient, and Bureau of National Health Insurance.