content: SECURITIES AND EXCHANGE COMMISSION
                        Washington, D.C.  20549
  
  
                              FORM 8-K
  
                           CURRENT REPORT
  
  
  
  Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.
  
  Date of Report (Date of earliest event reported) November 13, 1996.
  
  
                       HEALTH MANAGEMENT, INC.
   -----------------------------------------------------------------
         (Exact Name of Registrant as Specified in its Charter)
  
  
       Delaware             0-18472              75-2096632
   ---------------------------------------------------------------
  (State or other          (Commission File     (I.R.S. Employer
  jurisdiction of               Number)         Identification No.)
  incorporation)
  
  
  
  1371-A Abbott Court, Buffalo Grove, Illinois          60089
  -----------------------------------------------------------------
  (Address of principal executive offices)            (Zip Code)
  
  
                          (847) 913-2700
  -----------------------------------------------------------------
          (Registrant's telephone number, including area code)
  
  
                           Not Applicable
  -----------------------------------------------------------------
       (Former name, former address and former fiscal year,
                    if changed since last report.)
  
  
  <PAGE>
  
  Item 5.  Other Events.
  
       On November 13, 1996, Transworld Home HealthCare, Inc., a New York
  corporation ("Transworld"), acquired the bank debt of Health Management,
  Inc., a Delaware corporation (the "Company"), having a face value of
  approximately $28 million (the "Debt Acquisition").  In connection with the
  Debt Acquisition, Transworld extended the Forbearance Agreement, which was to
  terminate on November 15, 1996, to December 12, 1996 (thereby agreeing to
  forebear from exercising any remedies to which Transworld was entitled with
  respect to such acquired bank debt) and agreed to extend up to an additional
  $3 million to the Company under the revolving line of credit.
  
       Also on November 13, 1996, the Company entered into a Stock Purchase
  Agreement with Transworld, which provides for Transworld's purchase of
  8,964,262 newly issued shares of the common stock of the Company
  (representing approximately 49% of the outstanding shares after giving effect
  to such issuance) and an option for an additional 746,713 shares of common
  stock of the Company (representing approximately 2% of the outstanding shares
  after giving effect to the exercise of such option).  The consideration for
  the 8,964,262 shares includes, (i) Transworld entering into the Merger
  Agreement (described below), (ii) the Debt Acquisition, (iii) Transworld
  forebearing under the Credit Agreement until on or about December 12, 1996,
  (iv) Transworld agreeing to extend an additional $3 million under the
  revolving credit facility, (v) Transworld causing to be cancelled certain
  warrants to purchase 5% of the outstanding stock of the Company on a fully
  diluted basis, at an exercise price of $2.00 per share, to which the
  Company's senior lenders were entitled, and (vi) $1.00 per share of Common
  Stock.  The exercise price for the option is $1.00 per share and the term
  extends for the one-year period following the consummation of the stock
  purchase transaction.  In addition, the shares purchased, as well as the
  shares subject to the option, will be entitled to certain demand and
  piggyback registration rights.  The closing in connection with the Stock
  Purchase Agreement is expected to occur on the latter of December 12, 1996 or
  the date of the fulfillment of the closing conditions, which include, among
  others, approval by Transworld's lenders and preliminary court approval of a
  modified settlement agreement to the pending class action lawsuit against the
  Company providing for the settlement of such action for, among other things,
  an aggregate cash payment of $7.2 million (the "Modified Settlement").  Of
  the approximately $8.9 million proceeds expected to be obtained in connection
  with the consummation of the stock purchase, any amounts loaned by Transworld
  under the revolving line of credit from November 13, 1996, and interest
  thereon, shall be repaid.
  
  <PAGE>
  
       Additionally on November 13, 1996, the Company entered into an Agreement
  and Plan of Merger with Transworld pursuant to which a newly-formed
  subsidiary of Transworld will merge into the Company and the stockholders of
  the Company (excluding Transworld) will receive cash consideration equal to
  $2.00 per share.  The consummation of the merger is subject to certain
  conditions including, without limitation, final court approval of the
  Modified Settlement, the expiration or termination period of any applicable
  waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of
  1976, as amended, and other regulatory approvals.  If the merger is not
  consummated by June 30, 1997 either party may terminate the agreement.
  
       In connection with the proposed merger, the Board of Directors of the
  Company received a fairness opinion from National Westminster Bank, Plc. to
  the effect that the $2.00 per share cash price is fair, from a financial
  point of view, to the stockholders of the Company.
  
       The above summary of the Merger Agreement, Stock Purchase Agreement and
  Forbearance Agreement is not intended to be complete and is qualified in its
  entirety by reference to the detailed provisions of each of these agreements,
  which are attached hereto as Exhibits.  In addition, a copy of the press
  release issued by the Company in connection with the above-stated
  transactions is attached hereto as Exhibit 99.1 to this Form 8-K and is
  incorporated herein by reference.
  
  <PAGE>
  
  Item 7.  Financial Statements and Exhibits.
  
       (c)  Exhibits
  
  Exhibit Number                Description
  -------------                  ----------
  
       2.1.      Stock Purchase Agreement, dated as of
                 November 13, 1996, between the Company
                 and Transworld.
  
       2.2.      Agreement and Plan of Merger, dated as
                 of November 13, 1996, among Transworld,
                 IMH Acquisition Corp., and the Company.
  
       2.3.      Forbearance Agreement, dated as of
                 November 13, 1995, between the Company
                 and Transworld.
  
  
       99.1      Press release dated November 14, 1996 issued by the Company.
  
            Exhibits 2.1, 2.2 and 2.3 listed above omit certain schedules and
       exhibits, which are referred to therein.  The Company agrees to furnish
       a copy of any such omitted schedule or exhibit supplementally upon
       request from the Commission's staff.
  
  
  <PAGE>
  
                             SIGNATURES
  
  
  Pursuant to the requirements of the Securities Exchange Act of 1934, the
  Registrant has duly caused this report to be signed on its behalf by the
  undersigned thereunto duly authorized.
  
  
                                HEALTH MANAGEMENT, INC.
                                (Registrant)
  
  
  Date:  November 27, 1996
  
  
                                /s/ W. JAMES NICOL
                                ----------------------
                                Name:  W. James Nicol
                                Its:  President
  
  <PAGE>
  
  
                          Index to Exhibits
  
  
  
  Exhibit                                           
  Number                   Description               
  -----                     ----------               
  
  2.1.      Stock Purchase Agreement, dated as of
            November 13, 1996 between the Company
            and Transworld Home Healthcare, Inc.
  
  2.2.      Agreement and Plan of Merger, dated as
            of November 13, 1996, among Transworld
            Home Healthcare, Inc., IMH Acquisition
            Corp., and the Company.
  
  2.3.      Forbearance Agreement, dated as of
            November 13, 1995, between the Company
            and Transworld Home Healthcare, Inc.
  
  
  99.1      Press release dated November 14, 1996
            issued by the Registrant.
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metadata_filer: {"company-data": {"conformed-name": "HEALTH MANAGEMENT INC/DE", "cik": "0000791164", "assigned-sic": "5912", "irs-number": "752096632", "state-of-incorporation": "DE", "fiscal-year-end": "0430"}, "filing-values": {"form-type": "8-K", "act": "34", "file-number": "000-18472", "film-number": "96673518"}, "business-address": {"street1": "4250 VETERANS MEMORIAL HGWY", "street2": "STE 400 WEST", "city": "HOLBROOK", "state": "NY", "zip": "11741", "phone": "5169810034"}, "mail-address": {"street1": "4250 VETERANS MEMORIAL HIGHWAY", "city": "HOLBROOK", "state": "NY", "zip": "11741"}, "former-company": [{"former-conformed-name": "HOMECARE MANAGEMENT INC", "date-changed": "19920703"}, {"former-conformed-name": "COSMOS RESOURCES INC", "date-changed": "19880314"}]}
text: SECURITIES AND EXCHANGE COMMISSION
                        Washington, D.C.  20549
  
                              FORM 8-K
  
                           CURRENT REPORT
  
  Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.
  
  Date of Report (Date of earliest event reported) November 13, 1996.
  
                       HEALTH MANAGEMENT, INC.
   -----------------------------------------------------------------
         (Exact Name of Registrant as Specified in its Charter)
  
       Delaware             0-18472              75-2096632
   ---------------------------------------------------------------
  (State or other          (Commission File     (I.R.S. Employer
  jurisdiction of               Number)         Identification No.)
  incorporation)
  
  1371-A Abbott Court, Buffalo Grove, Illinois          60089
  -----------------------------------------------------------------
  (Address of principal executive offices)            (Zip Code)
  
                          (847) 913-2700
  -----------------------------------------------------------------
          (Registrant's telephone number, including area code)
  
                           Not Applicable
  -----------------------------------------------------------------
       (Former name, former address and former fiscal year,
                    if changed since last report.)
  Item 5.  Other Events.
  
       On November 13, 1996, Transworld Home HealthCare, Inc., a New York
  corporation ("Transworld"), acquired the bank debt of Health Management,
  Inc., a Delaware corporation (the "Company"), having a face value of
  approximately $28 million (the "Debt Acquisition").  In connection with the
  Debt Acquisition, Transworld extended the Forbearance Agreement, which was to
  terminate on November 15, 1996, to December 12, 1996 (thereby agreeing to
  forebear from exercising any remedies to which Transworld was entitled with
  respect to such acquired bank debt) and agreed to extend up to an additional
  $3 million to the Company under the revolving line of credit.
  
       Also on November 13, 1996, the Company entered into a Stock Purchase
  Agreement with Transworld, which provides for Transworld's purchase of
  8,964,262 newly issued shares of the common stock of the Company
  (representing approximately 49% of the outstanding shares after giving effect
  to such issuance) and an option for an additional 746,713 shares of common
  stock of the Company (representing approximately 2% of the outstanding shares
  after giving effect to the exercise of such option).  The consideration for
  the 8,964,262 shares includes, (i) Transworld entering into the Merger
  Agreement (described below), (ii) the Debt Acquisition, (iii) Transworld
  forebearing under the Credit Agreement until on or about December 12, 1996,
  (iv) Transworld agreeing to extend an additional $3 million under the
  revolving credit facility, (v) Transworld causing to be cancelled certain
  warrants to purchase 5% of the outstanding stock of the Company on a fully
  diluted basis, at an exercise price of $2.00 per share, to which the
  Company's senior lenders were entitled, and (vi) $1.00 per share of Common
  Stock.  The exercise price for the option is $1.00 per share and the term
  extends for the one-year period following the consummation of the stock
  purchase transaction.  In addition, the shares purchased, as well as the
  shares subject to the option, will be entitled to certain demand and
  piggyback registration rights.  The closing in connection with the Stock
  Purchase Agreement is expected to occur on the latter of December 12, 1996 or
  the date of the fulfillment of the closing conditions, which include, among
  others, approval by Transworld's lenders and preliminary court approval of a
  modified settlement agreement to the pending class action lawsuit against the
  Company providing for the settlement of such action for, among other things,
  an aggregate cash payment of $7.2 million (the "Modified Settlement").  Of
  the approximately $8.9 million proceeds expected to be obtained in connection
  with the consummation of the stock purchase, any amounts loaned by Transworld
  under the revolving line of credit from November 13, 1996, and interest
  thereon, shall be repaid.
  Additionally on November 13, 1996, the Company entered into an Agreement
  and Plan of Merger with Transworld pursuant to which a newly-formed
  subsidiary of Transworld will merge into the Company and the stockholders of
  the Company (excluding Transworld) will receive cash consideration equal to
  $2.00 per share.  The consummation of the merger is subject to certain
  conditions including, without limitation, final court approval of the
  Modified Settlement, the expiration or termination period of any applicable
  waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of
  1976, as amended, and other regulatory approvals.  If the merger is not
  consummated by June 30, 1997 either party may terminate the agreement.
  
       In connection with the proposed merger, the Board of Directors of the
  Company received a fairness opinion from National Westminster Bank, Plc. to
  the effect that the $2.00 per share cash price is fair, from a financial
  point of view, to the stockholders of the Company.
  
       The above summary of the Merger Agreement, Stock Purchase Agreement and
  Forbearance Agreement is not intended to be complete and is qualified in its
  entirety by reference to the detailed provisions of each of these agreements,
  which are attached hereto as Exhibits.  In addition, a copy of the press
  release issued by the Company in connection with the above-stated
  transactions is attached hereto as Exhibit 99.1 to this Form 8-K and is
  incorporated herein by reference.
  Item 7.  Financial Statements and Exhibits.
  
       (c)  Exhibits
  
  Exhibit Number                Description
  -------------                  ----------
  
       2.1.      Stock Purchase Agreement, dated as of
                 November 13, 1996, between the Company
                 and Transworld.
  
       2.2.      Agreement and Plan of Merger, dated as
                 of November 13, 1996, among Transworld,
                 IMH Acquisition Corp., and the Company.
  
       2.3.      Forbearance Agreement, dated as of
                 November 13, 1995, between the Company
                 and Transworld.
  
       99.1      Press release dated November 14, 1996 issued by the Company.
  
            Exhibits 2.1, 2.2 and 2.3 listed above omit certain schedules and
       exhibits, which are referred to therein.  The Company agrees to furnish
       a copy of any such omitted schedule or exhibit supplementally upon
       request from the Commission's staff.
  SIGNATURES
  
  Pursuant to the requirements of the Securities Exchange Act of 1934, the
  Registrant has duly caused this report to be signed on its behalf by the
  undersigned thereunto duly authorized.
  
                                HEALTH MANAGEMENT, INC.
                                (Registrant)
  
  Date:  November 27, 1996
  
                                /s/ W. JAMES NICOL
                                ----------------------
                                Name:  W. James Nicol
                                Its:  President
  Index to Exhibits
  
  Exhibit                                           
  Number                   Description               
  -----                     ----------               
  
  2.1.      Stock Purchase Agreement, dated as of
            November 13, 1996 between the Company
            and Transworld Home Healthcare, Inc.
  
  2.2.      Agreement and Plan of Merger, dated as
            of November 13, 1996, among Transworld
            Home Healthcare, Inc., IMH Acquisition
            Corp., and the Company.
  
  2.3.      Forbearance Agreement, dated as of
            November 13, 1995, between the Company
            and Transworld Home Healthcare, Inc.
  
  99.1      Press release dated November 14, 1996
            issued by the Registrant.