If a patient has significant difficulty breathing, requires oxygen, or is wheezing and not responding to medicines given in a clinic or prescribed for home, or if a patient is vomiting or can't drink enough to stay hydrated or take medicines by mouth, hospitalization would be in order.
Also, providers may quickly hospitalize the very young, very old, very sick, or those who are chronically ill (especially patients with heart or lung disease or those with diabetes or immune system problems).
Finally, it a patient "fails" home treatment for pneumonia (continued fever or breathing difficulty despite an antibiotic or other medicine given in clinic or prescribed for home), hospitalization will likely be recommended by a provider.
One thing to remember about pneumonia is that the cough may be the last thing to clear up and may linger for a couple of weeks. Most of the time, if your fever, breathing difficulty, and other symptoms are improving or have resolved, you are well on your way to recovery and probably don't need to see your provider again for the problem, unless he or she recommends it.