Introduction: Recent studies have shown that prophylactic use of intra-wound vancomycin in posterior instrumented spine surgery substantially decreases the incidence of wound infections requiring repeat surgery; significant cost savings are thought to be associated with the use of vancomycin in this setting. The aim of this project is to elucidate cost savings associated with the use of intra-wound vancomycin in posterior spinal surgeries using a budget-impact model. Methods: Data from a matched cohort of 300 patients, 150 with prophylactic vancomycin and 150 without, who underwent posterior spinal surgery (instrumented and noninstrumented) over 2 years were analyzed. We then retrospectively reviewed the cost of return surgery for treatment of surgical site infection. The total reimbursement received by the healthcare facility was used to model the costs associated with repeat surgery, and this cost was compared with the cost of a single local application of vancomycin costing about $12. Results: Of the 150 patients in the treatment group, the return-to-surgery rate for surgical site infection was zero. In the group without vancomycin, 7 patients required a total of 13 procedures. The mean cost per episode of surgery based on the reimbursement received by the health care facility was $41,251 (range, $14,459-$114,763). A total of $536,267 was spent on 4% of the 150 patient cohort without vancomycin, whereas a total of $1,800 ($12 x 150 patients) was spent on the cohort treated with vancomycin. Conclusion: This study shows a significant reduction in surgical site infections requiring a return to surgery, with large cost savings also associated with use of intra-wound vancomycin powder. In our study population, the cost savings totaled more than half a million dollars.