From 1987–99, influenza and pneumococcal vaccination rates among elderly Medicare beneficiaries increased by 300 percent and 500 percent, respectively. Despite these gains, annual rates of hospitalizations for pneumonia and influenza (P&I) have not decreased; rather, they have increased steadily. The authors investigate whether this paradoxical increase in hospitalization rates reflects an increasing burden of P&I or the effects of a changing healthcare environment. They find that from 1987–99, P&I hospitalizations per one thousand beneficiaries increased from 15.1 to 23.4. Of this increase, 23 percent was due to an aging Medicare population, 2.4 percent was due to increased rates of rehospitalization, and at most 5 percent was due to upcoding. There was no evidence that physicians were increasingly admitting patients with less complicated cases of P&I. The changing healthcare environment only partially explained the paradoxical increase in P&I hospitalizations. P&I appears to be an increasing burden to the elderly, despite increased vaccination rates.
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