Background During the COVID-19 pandemic, health care systems are under extreme pressure. This study analyzed health care resource use (HCRU) and costs in patients admitted to the hospital for COVID-19 and aimed to estimate the one-year direct medical cost of the disease in Turkey. Methods This retrospective cohort study was conducted between March and July 2020 in a tertiary hospital (n = 1056) in Istanbul. Patient demographics, clinical and treatment characteristics at admission, comorbidities, disease severity, and costs from a payer perspective were evaluated using the microcosting method. The results include LOS, hospital costs, and univariate and generalized linear models to investigate influencing factors. The data were extrapolated to provide a country-level estimate. Results The mean length of stay was 9.1 days (SD 6.9). The mean length of stay was 8.0 days (4.7) for patients hospitalized in wards versus 14.8 days (SD 12.0) for patients hospitalized in the ICU. In univariate analysis, several factors, including O-2 therapy (+ 3.7 days), high CRP > 41.8 mg/L (+ 3.8 days), and elevated ferritin (+ 3.5), were found to be associated with a longer LOS (p < 0.05). The direct annual medical cost of COVID-19 was estimated at PPP$ 2.1 billion. The COVID-19 pandemic resulted in a direct medical burden that corresponds to 2.0% of the government health expenditures and 0.8 per thousand of Turkey's gross domestic product (GDP). Conclusions Estimating the impact of this pandemic in terms of HCRU and costs to the health care system can help design strategies to manage the pandemic.