Our study investigated whether pre-operative screening and treatment for anaemia and suboptimal iron stores in a patient blood management clinic is cost effective. We used outcome data from a retrospective cohort study comparing colorectal surgery patients admitted pre- and post-implementation of a pre-operative screening programme. We applied propensity score weighting techniques with multivariable regression models to adjust for differences in baseline characteristics between groups. Episode-level hospitalisation costs were sourced from the health service clinical costing data system; the economic evaluation was conducted from a Western Australia Health System perspective. The primary outcome measure was the incremental cost per unit of red cell transfusion avoided. We compared 441 patients screened in the pre-operative anaemia programme with 239 patients not screened; of the patients screened, 180 (40.8%) received intravenous iron for anaemia and suboptimal iron stores. The estimated mean cost of screening and treating pre-operative anaemia was AU$332 (£183; US$231; €204) per screened patient. In the propensity score weighted analysis, screened patients were transfused 52% less red cell units when compared with those not screened (rate ratio = 0.48, 95%CI 0.36–0.63, p < 0.001). The mean difference in total screening, treatment and hospitalisation cost between groups was AU$3776 lower in the group screened (£2080; US$2629; €2325) (95%CI AU$1604–5947, p < 0.001). Screening elective patients pre-operatively for anaemia and suboptimal iron stores reduced the number of red cell units transfused. It also resulted in lower total costs than not screening patients, thus demonstrating cost effectiveness.