In an effort to determine how lower health care expenditures in Canada as compared with the United States translate into actual hospital services received, we examined discharge rates, lengths of stay, and the case-mix index (calculated from diagnosis-related group weights) for those 65 years of age and older hospitalized with cardiovascular disease in the United States and two Canadian provinces, Manitoba and Ontario, in 1981 and 1985. We expected that the effect of the prospective payment system might be reflected in changes between 1981 and 1985. Discharge rates for medical treatment of cardiovascular diseases were 2.9 percent higher in the United States than in Canada in 1981, but 1.8 percent lower in 1985; however, the case-mix index was 3.0 percent lower in 1981 and 4.8 percent higher in 1985. The case-mix index for combined medical and surgical discharges was 5.0 percent lower in the United States in 1981, but 10.7 percent higher in 1985. U.S. surgical discharge rates were 20 percent lower in 1981, but 20 percent higher in 1985. Rates of coronary bypass surgery were much higher in the United States in both years, but increased rapidly in both countries, particularly among those 75 and older. Elderly Canadians appeared to have access to cardiovascular surgery, with the exception of coronary bypass surgery, and to other hospital care for cardiovascular disease similar to that of elderly people in the United States.