Savings resulting from the substitution of ambulatory for inpatient care have been widely reported. This study examined the hypothesis that these savings may result from a reduction of services provided to the ambulatory patient and/or from an incomplete evaluation of these services, when the market value of relatives' support services is not included. Cataract extraction was chosen as an example. Sixty-two medical records of patients admitted to Mount Sinai for cataract extraction in the first six months of 1980 were reviewed, and the cost of their stay was estimated. This cost was then compared to five simulations of home care costs. The simulations differed among themselves primarily as to the experience and training of the person providing nursing services--from an RN to an untrained relative. The quantity and type of service provided to inpatients were assumed to be provided to ambulatory patients in all five simulations. The results of the comparison of hospital costs to home costs were that, in the case of post-cataract extraction, home care is less costly than hospital care either if fewer services are provided to home patients or if the cost of some services assumed by relatives is not calculated.