The role of institutions has come into question in recent decades, and the size of the institutionalized population has been drastically reduced. Risk-adjusted mortality rates in institutions and the community in California from 1980 through 1992 were compared, with the aim of improving our understanding of the capacity of the community health system to support deinstitutionalization. Risk-adjusted odds on mortality were estimated to be 72% higher in the community than in institutions. Some problems with health care delivery in the community were reviewed; these may help account for the difference. Consumers and guardians should weight these considerations when making choices between institutional versus community-based care.