The Nursing Home Transition program is just one part of a state strategy to shift more individuals into home and community care.

The Rendell administration has beefed up funding of home-assistance programs intended to keep people out of nursing homes in the first place and is preparing financial incentives to encourage nursing homes to eliminate skilled-care beds. New assisted-living regulations are being developed that will add government financing for people who require only some supervision.

Use of alternative living options will also make the government's long-term care dollars stretch further, said Michael Hall, deputy secretary of long-term living for the state.

"If we're spending $70,000 or $80,000 a year on a nursing home bed, and I can take that bed off line, I can buy a heck of a lot of home and community-based services and help a lot more people," Mr. Hall said. "It's about rebalancing the system and services so we have a healthier array of more cost-effective services that do better in meeting consumer preferences."

Nursing home occupation has declined slightly the past two years in Pennsylvania, to about 80,000 beds. Subsidies for home and community assistance have more than doubled in the last five years. The trend is in the direction sought by the Rendell administration, after recognizing earlier this decade that the state's imbalance toward institutional care was among the most lopsided in the nation.

State officials have informed the nursing home industry that it will financially assist those who want to shift their emphasis to other types of care. .

The assistance could be similar to that planned by Allegheny County, which intends to subtract nursing home beds from its John J. Kane Regional Centers and add assisted- and independent-living options. County officials say the state will help cover the conversion cost by crediting the Kanes for the Medical Assistance dollars they would have received if still used for nursing.

"A lot of folks in the nursing home industry understand the marketplace is shifting and the demand for home- and community-based services -- and more independent living settings than nursing homes typically allow for -- is growing," Mr. Hall said.

The shift comes at a time when government evaluations of nursing homes show that, for the most part, care and quality has improved in Pennsylvania. Some industry executives acknowledge that regardless of such improvements, public perception will drive more fundamental changes in what they offer consumers.

Vincentian Collaborative Systems, which operates three nursing homes in Allegheny County, will undoubtedly convert some nursing home beds to assisted living in the future, said Sister Theresa Novak, the nonprofit organization's chief executive officer. That's the case, she said, even though the facilities' nursing beds are presently 98 percent filled.

"That's today, but in a couple of years that's not going to be the case, and you don't want a white elephant on your back," Sister Novak said. "We know aging in place is the theme of where [the state] is going. We know Medical Assistance dollars are becoming fewer for nursing homes."

Nursing home officials don't view themselves as an endangered species, as they point out there will always be a severely limited portion of the population needing help, which will increase as life spans keep increasing. PANPHA, a nonprofit nursing home association in Pennsylvania, successfully pressed the Legislature and governor last year for creation of a Senior Care and Services Study Commission.

That group is to begin working this year to outline what the future of long-term care services and funding will be in Pennsylvania..

"Our position has been it's not an either-or decision," between funding of homes and institutions, said Paul Winkler, president of Presbyterian SeniorCare, which provides all levels of care. "The whole idea is to look at gaps, how to fill them, how to do reimbursements, the whole continuum of services."

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