OBJECTIVES: To compare the use of medical services provided under the Minnesota Senior Health Options (MSHO) (a special program designed to serve dually eligible older persons) with that provided to controls who received fee-for-service Medicare and Medicaid managed care. DESIGN: Quasi-experimental design using two control groups; separate matched cohort and rolling cross-sectional analyses; regression models used to adjust for case-mix differences. SETTING: Urban Minnesota community and nursing home long-term care. PARTICIPANTS: Dually eligible elderly MSHO enrollees in the community and in nursing homes were compared with two sets of controls; one was drawn from nonenrollees living in the same area (control-in) and another from comparable persons living in another urban area where the program was not available (control-out). Cohorts living in the community and in nursing homes were included. MEASUREMENTS: Use of hospitals and emergency rooms, physician visits. RESULTS: In the community cohort, there were no significant differences in hospital admission rates or in hospital days. MSHO enrollees had significantly fewer preventable hospital admissions and significantly fewer preventable emergency services than the control-in group. MSHO nursing home enrollees had significantly fewer hospital admissions than either control group with or without adjustment at 12 and 18 months. MSHO enrollees had significantly fewer hospital days and preventable hospitalizations than the control-in group. MSHO enrollees had significantly fewer emergency room visits and preventable emergency room visits than either control group. CONCLUSION: In general, the results of this evaluation are mixed but favor MSHO. The effect of MSHO was stronger for nursing home enrollees than community enrollees. The lower rate of preventable hospitalizations and emergency room visits of MSHO enrollees suggests that MSHO affected the process of care by providing more of some types of preventive and community-care services for community residents.