The goal of the investigation was to study case management and functional outcome in older patients with hip fracture. A prospective observational survey was performed, including all patients aged 65 years and over presenting with hip fracture in Heidelberg, from 1 July 1999 to 30 June 2000. All patients were reassessed by telephone calls 6 months post-fracture. A total of 331 patients were included (mean age 81.5 years, 81% female,23.8% nursing home residents). Hip fracture incidence per 1,000 was 7.8/year, and nursing home residents had a six times higher incidence rate than those living at home. Prior to the fracture, half of the patients were dependent in ambulation and a third needed support in basic activities. With substantial comorbidity (42% cognitive impairment), complications were common. Geriatric care was needed for 82% of the survivors. In-hospital treatment costs were about 10,000 Euro per fracture. Mortality at 6 months was 19.9%. The majority of survivors showed loss of competence and mobility. Functional outcome in older patients with hip fracture is disappointing. As the majority of the patients are frail, clinical treatment is complicated by "geriatric" problems. Thus, improved interdisciplinary care, with close cooperation between geriatricians and surgeons might result in a better functional outcome.