There is a rather substantial consensus among policy researchers that community based long-term care services have negligible ability to offset nursing home use, and that programs designed around them for this purpose are unlikely to succeed. In this study we argue that such a conclusion may be premature, and that community services might be made more effective through better management of their mix and allocation. To test this idea, we use data from the National Long-Term Care Channeling Demonstration to estimate a function relating nursing home use to the use of various types of community services. We then use this in forming an objective function for a mathematical optimization which minimizes total population nursing home use as a function of community service use, subject to a total expenditure constraint. We find that marked reductions in nursing home use can be produced without increasing community expenditures, but that the implied service mix and allocation pattern is considerably different from that which was actually observed.