Objective To assess factors explaining hospitalization in Tajikistan and discuss policy implications for reforms in hospital care. Methods This study involves a secondary analysis of micro-data collected from a nationally-representative household survey conducted in Tajikistan in 2003. Three empirical models are employed: binomial logit regression for the admission to the hospital; zero truncated negative binomial (ZTNB) regression for the length of hospital stay; and ordinary least square (OLS) for the amount of out-of-pocket expenditures for hospitalization. Findings Variation in hospital admission is due to the differences in ability to pay, long-standing illness, gender, age, and educational level. Factors explaining out-of-pocket expenditures include ability to pay, having long-standing illness, and having surgery and receiving intensive care. The most important out-of-pocket expenditures are payments for pharmaceuticals and supplies. Finally, long hospital stay that is the result of outdated treatment protocols, rigid financial and management system, lack of funding, and weakness of primary and long-term care. As a result, long time in inpatient care is mostly used ineffectively. Conclusion Strategies to address the existing deficiencies include voluntary community-based health insurance for rural areas, targeted subsidized care for the neediest, improvements in procurement of pharmaceuticals and supplies, and rationalization of hospital primary and long-term care. Copyright (C) 2010 John Wiley & Sons, Ltd.