We analyse variations in cost or length of stay (LoS) for 66 587 patients from 10 European countries receiving a coronary artery bypass graft (CABG) procedure. In five of these countries, variations in cost are analysed using log-linear models. In the other five countries, negative binomial regression models are used to explore variations in LoS. We compare how well each country's diagnosis-related group (DRG) system and a set of patient-level characteristics explain these variations. The most important explanatory factors are the total number of diagnoses and procedures, although no clear effects are evident for our CABG-specific diagnostic and procedural variables. Wound infections significantly increase LoS and costs in most countries. There is no evidence that countries using larger numbers of DRGs to group CABG patients are better at explaining variations in cost or LoS. However, refinements to the construction of DRGs to group CABG patients might recognise first and subsequent CABGs or other specific surgical procedures, such as multiple valve repair. Copyright 2012 John Wiley & Sons, Ltd. Copyright 2012 John Wiley & Sons, Ltd.