Background The OECD countries have recently promoted policies of deinstitutionalisation and community-based carefor the elderly. These policies respond to common cost pressures associated with population aging, and the challenge ofproviding improved care for the elderly. They aim to substitute less costly services for institutional ones, to improve patientsatisfaction and decrease expenses. However, views concerning their success are mixed. We took a comparative cross-national approach to examine the evidence, to identify common features of an effective system of integrated care, and toexamine the potential of such models to positively affect care of the elderly, and public ®nances.Methods We conducted a systematic review of recent demonstration projects testing innovative models of care for theelderly in OECD countries. Projects included aimed to create comprehensive integration of acute and long-term care ser-vices, and were evaluated using a comparison group.Results For each project, we report available results on rates of hospitalisation, long term care institutionalisation, utilisa-tion and costs, impact on process of care, and health outcomes. In addition, the following common features of an effectiveintegrated system of care were identi®ed: a single entry point system; case management, geriatric assessment and a multi-disciplinary team; and use of ®nancial incentives to promote downward substitution.Conclusions Community-based care can impact favourably on rates of institutionalisation and costs. Comprehensiveapproaches to program restructuring are necessary, as cost-effectiveness depends on characteristics of the system of care.Expansion of successful programmes to achieve widespread use remains a critical challenge. Copyright # 2003 John Wiley& Sons, Ltd.key words Ð integrated care; community care; balance of care; demonstration programme