This study compares the personal characteristics, measures of functional status/case mix, and immediate discharge outcomes of two cohorts of nursing home patients (1980 and 1984). All of these patients had a prior history of nursing home care and all were readmitted to skilled nursing facilities from hospitals. In 1984, readmissions were more disabled, more debilitated, and significantly less likely to return home. They were almost twice as likely to be rehospitalized within 30 days of discharge from the hospital (26.7 percent versus 48.9 percent). Analyses showed poorer health status and an increased proportion of nursing home deaths and rehospitalizations in the 1984 group to be a function of time (1984 versus 1980) rather than of insurance coverage (Medicare versus other). Nursing home readmissions appear to be quite sensitive to cost-containment efforts, and they may require additional hospital days to stabilize their conditions in an effort to reduce the rate of hospital readmissions and the overall cost of care.