The first study of nursing-home care to weigh it as a mostly private industry, shaped by public policy, that has a daily effect--seldom to their advantage--on one and a half million Americans. Vladeck, who has a background in political science and public health, lays his cards on the table at the outset: ""the rhetoric of bad government and good private action"" is a major barrier to reform. After a brief, telling description of a typical (not horrendous) nursing home, he recounts the development of public policy from the adoption of the 1935 Social Security Act (which forbade payment of Old Age Assistance benefits to inmates of almshouses, but provided funds for purchasing services) through the inclusion of nursing homes in Hill-Burton (""which is why,"" among other things, ""nursing homes look so much like mini-hospitals"") to Medicare and Medicaid--whose labyrinthine workings (and indiscriminate outlays) he explains with devastating precision. He also puts his finger on basic flaws in the nursing-home system. The ""discipline"" of the market is missing: ""good facilities do not drive poor ones out of business, nor is there a direct correlation between quality and price."" Existing standards are concerned almost exclusively with inputs (staffing, physical facilities) and process (paperwork), rather than with outcomes (e.g., how well newly-admitted patients should do over the next six months), Then, too, standards-writers are reluctant to set stringent requirements for fear that nursing homes will be unable to meet them, and those that do will meet them only at great, eventually public, expense. He is realistic about the limits of reform (nursing homes ""will never be home""), but nonetheless he makes some sound, concrete proposals: the government could nationalize a small fraction of the industry, and these facilities could serve as a yardstick against which private-sector performance could be measured; more funds could be deflected from institutional to home care. Elsewhere he seems to ascribe too much importance to the shortage of physicians (""orders for follow-up testing, rehabilitation services, dietary changes, or special nursing services are ignored""); not only is more involved here, but the hospice movement is managing to overcome some of these same problems in the care of the terminally ill. Overall, however, this is an outstanding analysis of the system's deficiencies--and a credit not only to the author, but to the Twentieth Century Fund, which backed it.