percent in the same period. This growth can be expected to continue, but the growth in this sector generally does not involve skilled nursing personnel. In 1993, expenditures for home health care reached nearly $21 billion, (not including the $4 billion spent for care provided by hospital based home health care). Public financing accounted for nearly one-half of the expenditures for home health care (Levit et al., 1994).

Nursing facilities, like other sectors of the health industry, are consolidating into larger health care organizations. Although not as rapidly and widespread as the hospital industry, the nursing homes are diversifying in the services they offer. HCIA and Arthur Andersen (1994) report that 23 of the 25 largest nursing home chains were involved in acquisitions in 1993. Nursing homes and chains are also forming integrated networks of services with hospitals, physicians, subacute care providers, home health care, and other relevant providers. Despite the recent movement toward consolidation within the industry, nursing home chains control only about 35 percent of the market and the 20 largest chains operate only 18 percent of the nursing home industry (HCIA and Arthur Andersen, 1994).

Many providers are developing their own home- and community-based divisions or affiliating with existing providers of those services. Approximately 4 percent of nursing facilities were offering these services in 1992. Nursing facilities are also expanding to cover services such as specialty care, rehabilitation, adult day care, assisted living, and respite care. Approximately 22 percent of all nursing facilities currently offer assisted living services. Some nursing homes are shifting from being primarily a place for custodial care to being facilities with