THERE ARE about 60,000 patients—mostly elderly—in Massachusetts nursing homes and hospitals for the chronically ill, and 37,000 are paid for by Medicaid. The services rendered to these patients cost more than half a billion dollars annually, and this includes approximately half the total Medicaid dollars expended by the Commonwealth of Massachusetts (personal communication, Department of Public Welfare, Medicaid Division, Commonwealth of Massachusetts, February 1982). These figures reflect a growing national problem; 1.5% of the population in the United States between the ages of 65 and 74 years, 6% between 75 and 84 years, and 20% of those older than 85 years are institutionalized in hospitals for the chronically ill or in nursing homes. This group is a rapidly growing segment of our population. A more depressing statistic shows that elderly patients institutionalized for longer than six months have little chance of being discharged, unless it is for transfer to a