We wished to test the hypothesis that elderly people with impaired cognitive function were heavier users of both outpatient and inpatient hospital services. In a retrospective cohort study, 144 elderly people aged 75-97 years (50 men and 94 women) identified from a prevalence survey of dementia were traced over an average period of 4 years. They were categorized into three groups: cognitively impaired, physically frail and physically healthy. Elderly people with impaired cognitive function had fewer contacts with outpatient services (p = 0.0003) but did not differ in inpatient service use from subjects with normal cognitive function. Cognitively impaired people who lived alone had longer hospital stays (p = 0.002) and a higher admission rate to geriatric wards (p = 0,009). Negative self-rated health was an important factor predicting more contacts for men with inpatient services and geriatric outpatient services (both p = 0.002). Use of surgical outpatient services was associated with use of surgical inpatient services by the physically healthy group only (p = 0.0003). After adjusting for age, sex and physical health, cognitively impaired subjects were nearly twice as likely to die within four years as the other two groups (RR = 1.89).