Over the past 30 years, an explosion in health care expenditures has occurred. Prior to 1960, health care accounted for 4.4% of the U.S. Gross National Product; today it is 11%. Before rational solutions to controlling this rise can be proposed, we must determine whether the care that we are currently paying for is appropriate to the needs of the elderly. This paper analyzes the literature regarding appropriateness of acute care provided to the elderly. We identified 17 articles that explicitly cited appropriate or inappropriate care (including under-, over- and misuse) provided in hospital and ambulatory settings and for procedures, and 19 articles that presented data on the appropriateness of medication use in the elderly. Virtually every study included in this review found at least double-digit levels of inappropriate care. Perhaps as much as one-fifth to one-quarter of acute hospital services or procedures were felt to be used for equivocal or inappropriate reasons, and two-fifths to one-half of the medications studied were overused in outpatients. The few studies that examined underuse or misuse of services also documented the existence of these phenomena. This was especially true for the ambulatory care of chronic physical and mental conditions and concerned the use of low-cost technologies (visits, preventive services, some medications). Thus, we conclude that there appears to be a substantial problem in the matching of acute services to the needs of elderly patients. This mismatch occurs both in terms of overuse and underuse, at least for areas where research has been conducted.