Boyd H. Gilman, PhD, Division for Health Services and Social Policy Research, Health Economics and Financing, RTI International, 411 Waverly Oaks Rd., Ste. 330, Waltham, MA 02452, 781-788-8100, bgilman@rti.org, Arthur J. Bonito, PhD, Division for Health Services and Social Policy Research, Health Care Organization, Delivery, and Access, RTI International, 3040 Cornwallis Road, Post Office Box 12194, Research Triangle Park, NC 27709, and Celia R. Eicheldinger, MS, Statistics Divsion, RTI International, 3040 Cornwallis Rd, Research Triangle Park, NC 27709.

Objective: This study examines the impact of influenza immunization on subsequent health care utilization and expenditures among a nationally representative sample of elderly Medicare beneficiaries.

Methods: From a national survey of 160,000 Medicare fee-for-service beneficiaries, we obtained respondent demographic characteristics, supplemental insurance status, perceived health status, and whether they received a flu shot in late 1999. Other controls derived from Medicare claims included baseline service utilization and health status. Study outcomes included inpatient and outpatient service use and expenditures for pneumonia and influenza-related illnesses during the first four months of 2000. Four-part expenditure models were used to estimate the total savings associated with influenza immunization. Results: Average health care costs for pneumonia and influenza-related illnesses among beneficiaries with a flu shot were $64, compared with $89 among those without a prior flu vaccination, representing a four month estimated savings of $25 or nearly 30 percent. Influenza vaccination is associated with a 0.5 percent reduction in total Medicare spending per non-institutionalized elderly beneficiary. Reducing the current number of unvaccinated elderly people by half could result potentially in aggregate net savings of $50 million annually.

Conclusions: The U.S. Department of Health and Human Services has taken a number of steps towards achievement of the Healthy People 2010 goal of a 90 percent influenza immunization rate among the elderly. In addition to improving the health of elderly Americans, achieving the Healthy People 2010 influenza immunization goal may also result in a significant reduction in total and per capita medical expenditures.

Learning Objectives: