All new patient admissions of two Medicare-approved extended-care facilities were studied over a 19-month period with a correlation of patient disabilities pre- and post-Medicare. There was a marked increase in the death rate of Medicare patients shortly after admission from a hospital. While there was a marked increase in the discharge rate of patients during and at the conclusion of Medicare benefits, a significant number of these patients were discharged still markedly handicapped and requiring continuing long-term care. A follow-up study is required to determine the effects of recent stringent alterations in Medicare benefits upon patient care in the extended care facility.