Direct medical costs and medically related transportation costs incurred by patients in long-term-care facilities (LTCFs) as a result of influenza-like illness (ILI) were studied. The study was conducted from the payer's perspective. Charts were reviewed retrospectively for all patients who were residents of four Richmond, Virginia, LTCFs between January 1 and May 31, 1999. Consultant pharmacists gathered data on patient demographics, ILI status, vaccination for influenza and streptococcal pneumonia, diagnosis of asthma or chronic obstructive pulmonary disease, and utilization of health care services related to ILI. Services included the use of antimicrobials, antivirals, and respiratory drugs; emergency room visits; diagnostic tests; hospitalizations; and medically related transportation. Costs were based on average wholesale prices (for drugs) and Medicare or Medicaid reimbursement rates. Data were collected for 551 patients. Of these, 112 patients had been diagnosed with 128 cases of ILI during the study period. Twenty-two patients with ILI had 28 visits to emergency rooms, and 30 patients with ILI had 36 hospitalizations. The mean +/- S.D. cost per case of ILI was $1341 +/- $2063; inpatient hospital costs accounted for 84% of this amount. Centers for Disease Control and Prevention criteria for ILI provided a lower incidence of ILI and, consequently, a lower mean +/- S.D. cost of $968 +/- $1806 per case. ILI in patients in four LTCFs in Richmond, Virginia, generated substantial costs, the bulk of which resulted from hospitalization. A substantial percentage of the patients apparently were not immunized.