AbstractThe health care industry is preoccupied with increased costs because total expenditures for health services in the United States more than tripled between 1971 and 1981. Policy makers and health providers are looking at what contributes to these expenditures and ways to contain the escalating costs. One solution suggested has been the consideration of alternatives to institutional care, particularly home care. Historically, home care was provided by official or voluntary nursing agencies. Recently, proprietary, private, not‐for‐profit organizations have entered the home care arena. Home care reimbursement methods are a patchwork, causing confusion and cash flow problems. Public funds are administered by different levels of government, by several agencies within each level, and with various eligibility requirements. Private insurance coverage is uneven and limi