Abstract: Based on the data of CHARLS (2018) and with the help of the Heckman sample selection model, two-part model, treatment effect model and the causal mediation effect analysis method, this paper systematically investigates the effect, action path and heterogeneity of the integratedmedical and nursing care services in home and community on the elderly medical expenses.The results show that the integrated medical and nursing care services has significant economic performance, that is, promoting the utilization of outpatient services and reducing the probability of hospitalization. For every one unit increase in the integrated medical and nursing care services, the total hospitalization cost is reduced by about 2145 yuan. And there are significant health effects and service substitution effects, mainly through the improvement of the health level of the elderly, improving health care?behavior and medical service utilization behavior, thereby restraining the elderly medical expenditure.At the same time, theintegrated medical and nursing care services at home and in community has a more significant effect on the elderly groups who are living in rural areas, with the age not too old, with poor health, and living with spouses.Therefore, it is necessary to further improve the supply capacity and quality of the integrated medical and nursing care services, strengthen the dynamic health monitoring and behavior management of the service objects, and formulate the incentive mechanism forthe service suppliers and the preferential treatment policy for the demand side by aiming at the rural areas and the vulnerable groups.

Key words: integrated medical and nursing services in home and community, medical expenses, health effects, service substitution effects