This study classified consecutive admissions to a U.S. Department of Veteran Affairs Medical Center. Patients on acute medical and surgical wards (n = 3170) were divided into clinical subgroups based on diagnostic, prognostic and functional criteria. The groups were: (1) independent; (2) terminal; (3) medical; (4) dementia; and (5) rehabilitation candidate. Medical record data from hospital admission, discharge and 9 month follow-up were collected. The groups had unique patterns of survival, residence and use of health care services during follow-up. Subsequently, rehabilitation participants were compared with a group similar in age, major diagnostic category and functional ability, who did not receive rehabilitation. Twenty-one percent of persons meeting study criteria for rehabilitation received rehabilitation services. At follow-up, participants in rehabilitation had lower mortality, spent less time in skilled care and were less frequently hospitalized. Although exploratory in nature, this study supports previously observed benefits of rehabilitation. In combination with clinical assessment, the process of identifying patient subgroups may be useful in planning interventions more uniformly and in developing measures to reduce selection bias in rehabilitation admission decisions.