The literature related to medically fragile children (MFC) is analyzed, and a model is generated to improve quality of care and cost effectiveness. The sources of stress for families include home care professionals, respite care, financial concerns, and limited community resources. Children cared for in hospitals often experience less than desirable quality outcomes. Community-based pediatric extended care facilities may be a means of reducing family stress, improving physiologic and developmental outcomes, and reducing cost. Case management may significantly reduce parental stress and improve the quality of life for these children. Additional systematic study of care options for MFC is essential.