Since 1983, twenty-six small rural hospitals in five states have been developing models of the "swing-bed" concept as part of a coordinated national demonstration project. Based on the experiences of these hospitals, swing-bed programs use excess hospital capacity to provide short-term, post-acute care in rural communities where there are nursing home shortages, and, thus, help avoid the need for new nursing home construction. The availability of swing-bed services in rural hospitals has allowed the elderly patient to receive a full-range of long-term care services within the community to avoid transfer to a nursing home outside the community. Introduction of services also has improved patient care for all hospitalized elderly. Finally, the revenue from the swing-bed services has helped to stabilize small, rural hospitals faced with declining utilization. The demonstration has provided evidence that the swing-bed program has the potential to deliver a needed service to the rural elderly while contributing to the preservation of the small, rural hospital as a valuable community resource.