The long term objectives of this proposal are to describe the ethical dilemmas occurring in an innovative, capitated program for frail elders and to identify the effects of system structures on ethical decision making. Because all providers are influenced by the included in the research. This investigation is the first step in a research program aimed at understanding the impact of capitated environments on ethical decision making; evaluating the effectiveness of decision making for chronically ill and elderly persons; and, identifying processes which will support the ethical practice of nurses and their colleagues, within the realities of new economic and political systems. The proposed research will be conducted at a On-Lok replication site of the Program of All-inclusive Care for the Elderly (PACE) program. The PACE model offers an alternative to traditional institutional nursing home care, which has changed the paradigm for providing care to frail elderly persons. When innovations occur in a health care delivery system, new ethical questions and dilemmas will emerge and existing ethical issues (i.e. patient safety and independence), must be reconsidered in the new context. One of many exciting reasons for conducting this research is that ethical decision making in this setting has been largely unstudied.