The increase in the over-65 population and the rapid rise in health care costs have combined to create pressures on the health care system, giving rise to suggestions that health care services be rationed to offset increased expenditures. This report suggests that, before the rationing of health care is even discussed, it is necessary to determine whether (1) the care that we are currently paying for is appropriate to the needs and wants of the elderly; (2) the elderly are receiving care that maximizes their ability to function; (3) reductions in inappropriate use result in substantial savings; and (4) it is possible to develop a clinical-epidemiologic model that will eliminate most inappropriate care while minimizing a decrease in appropriate care. The report analyzes the literature regarding appropriateness of acute care provided to the elderly and, using this analysis, suggests policy options that could promote more appropriate care. The authors discuss three frameworks that can be used to measure appropriateness, and use these approaches to categorize the literature. They conclude that there is a substantial problem in matching acute care services to the needs of the elderly.