OBJECTIVES To assess the impact of continuity of treatment on hospitalization rate and costs of hospitalization in patients with asthma or COPD treated with fixed combination (fc) of long-acting b2-agonists (LABA) and inhaled corticosteroids (ICS). METHODS For this retrospective analysis, German IMS Disease Analyzer with longitudinal electronic medical record was used to identify patients with at least one diagnosis of asthma (ICD10 J45) or COPD (J44) in the study period October 2007 - September 2008, at least one fc-prescription in the first quarter of the study period and physician visits in all four quarters. The population was subdivided by diagnosis (asthma and COPD) and by SHI status (pensioners and insured-persons/qualified-family-member). Hospitalization rate was used as an indicator to assess the impact of continuity of treatment (continuous treatment (ct): at least one prescription of fc in each quarter, non-continuous treatment (nct): at least one prescription of fc in 1-3 quarters). Published data based on German DRGs were used to calculate hospitalization costs. RESULTS Of 106,911 patients with asthma or COPD, 2,486 insured-persons/qualified-family-member and 1.692 pensioners met the inclusion criteria for asthma; 801 insured-persons/qualified-family-member and 2,389 pensioners for COPD. In each of these subgroups, the proportion of patients with ct is significantly (p <0.05, Wilcoxon) higher in patients without hospitalization compared to with hospitalization. The risk for hospitalization was increased 1.4 to 1.7-fold in patients with nct (p <0.05) compared to patients with ct. The estimated associated additional hospitalization costs for sick funds per 10,000 patients were 370,000 - 960,000 EUR/year for the different subgroups of patients. CONCLUSIONS There is a strong impact of continuity of treatment on hospitalization rate of patients with asthma or COPD. Continuous treatment with fixed combination LABA/ICS can avoid asthma or COPD related hospitalizations and therefore offers potential for cost savings.