OBJECTIVES: This study compared pneumonia-related rehospitalizations and total medical costs among patients hospitalized for pneumonia and treated with linezolid or vancomycin post-discharge. METHODS: Two administrative claims databases were pooled and adults hospitalized for pneumonia and treated with linezolid or vancomycin post-discharge from January 1, 2007 through September 30, 2009 were identified.  Two pneumonia populations were studied: 1) “broad group” that included all pneumonia ICD-9 codes; and 2) “narrow group” that included ICD-9 codes consistent with the FDA labeled pneumonia indication. Within 42 days following hospital discharge, pneumonia-related rehospitalizations and total medical costs were compared between linezolid and vancomycin users.  Multivariable regression analyses were performed, controlling for index hospitalization length of stay, clinical and demographic factors. RESULTS: The “broad group” consisted of 1,468 patients (46% linezolid), while 417 patients (61% linezolid) met the “narrow” ICD-9 code criteria.  Unadjusted pneumonia-related rehospitalization rates were lower for linezolid relative to vancomycin in both the “broad” (9% vs. 15%, p <0.01) and “narrow” (6% vs. 15%, p <0.01) groups.  In the multivariate analysis, linezolid users were less likely to have a pneumonia-related rehospitalization in both the “broad” (OR=0.59, 95%CI: 0.42 – 0.83) and “narrow” (OR=0.34, 95%CI: 0.17 – 0.69) populations. Adjusted total costs were significantly lower for linezolid users in the “broad” population (cost savings: $1525; 95%CI: $1423 - $1627).  No significant difference in cost savings was observed in the “narrow” population (adjusted point estimate of cost savings with linezolid: $341; p = 0.63). CONCLUSIONS: Among commercially insured patients treated with either linezolid or vancomycin following hospitalization for pneumonia, linezolid was associated with significantly lower pneumonia-related re-hospitalizations and total direct medical costs in the “broad” population of all pneumonia patients.  In the narrower, FDA labeled-indication group, significantly lower pneumonia-related re-hospitalizations occurred among linezolid users but the between-treatment difference in total adjusted medical costs was not significant.