OBJECTIVES: Influenza results in excess morbidity and mortality and therefore causes significant burden in a society. Outcomes of the influenza vaccination program are influenced by patient acceptance to receive the vaccine. The cost-effectiveness of influenza vaccine at preventing hospitalization for lower respiratory infections in Hong Kong was examined at different levels of vaccination coverage. METHODS: A decision model was designed to simulate the outcomes of influenza vaccination programs at four different levels of vaccination coverage in a hypothetical cohort of elderly aged 65-year-old or above who have with no contraindications for influenza vaccine: 1) 16% (current vaccination coverage rate in Hong Kong); 2) 35% (vaccination coverage rate in some Asian countries; 3) 65%; and 4) 100%. The time horizon was one year. Model inputs were derived from literature, and outcome measures were direct medical cost (including vaccination) from the health care provider’s perspective, influenza-associated mortality rate, and quality-adjusted life-year (QALY) gained. Robustness of model results was examined by sensitivity analysis. RESULTS: In the base-case scenario, 100% vaccination coverage was associated with the lowest cost (USD6.92), the lowest influenza-associated mortality rate (0.30 deaths per 10,000 persons) and the highest QALYs gained (0.8358), followed by 65% coverage rate (USD8.08; 0.35 deaths per 10,000 persons; 0.8351 QALYs), 35% coverage rate (USD9.07; 0.39 deaths per 10,000 persons; 0.8345 QALYs) and 16% rate (USD9.70; 0.42 deaths per 10,000 persons; 0.8342 QALYs). The results were robust to variation of all model inputs in sensitivity analysis. CONCLUSIONS: In the present model, high coverage rate of influenza vaccination seems to be associated with lower direct medical cost, lower influenza-associated deaths and higher QALYs.