8-K

                                                                 
                                
               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) December 23, 1996.


                     HEALTH MANAGEMENT, INC.                     
       (Exact Name of Registrant as Specified in Charter)


     Delaware             0-18472              75-2096632       
(State or other          (Commission File     (I.R.S. Employer
jurisdiction of               Number)         Identification No.)
incorporation or
organization)


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 December 23, 1996, Transworld Home HealthCare, Inc., a New York
corporation ("Transworld"), the holder of Registrant's senior debt, extended to
January 10, 1997 the forbearance agreement relating to the Registrant's Credit
Agreement.  The extension of the forbearance agreement was granted in connection
with the extension to January 10, 1997 of the anticipated closing date of the
transactions contemplated by the Stock Purchase Agreement, dated November 13,
1996, as amended, between Transworld and the Company.

     On December 24, 1996 the Registrant issued a press release, a copy of which
is attached as Exhibit 99.1 to this Form 8-K and is incorporated herein by
reference.

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Item 7.  Financial Statements and Exhibits.

     (c)  Exhibits

Exhibit Number                Description
- --------------                -----------
     99.1           Press release dated December 24, 1996 issued
                    by the Registrant.

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                                  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:  December 27, 1996
                              
                                       /s/ Paul S. Jurewicz           
                                       --------------------------
                                       Name: Paul S. Jurewicz     
                                       Its:  Chief Financial Officer  

                                      -4-

EX-99.1

                                                                    Exhibit 99.1
Health Management, Inc.
1371-A Abbott Court
Buffalo Grove, Illinois 60089
Tel: 847-913-2700
Fax: 847-913-2715

FOR IMMEDIATE RELEASE


          HEALTH MANAGEMENT, INC. ANNOUNCES EXTENSION OF FORBEARANCE
                   AGREEMENT WITH TRANSWORLD HOME HEALTHCARE

Buffalo Grove, IL -- December 24, 1996 . . . Health Management, Inc. ("HMI")
(NASDAQ:HMIS) announced today that the forbearance agreement relating to its
credit agreement and senior debt has been extended to January 10, 1997.  The
extension of the forbearance agreement was granted by Transworld Home
HealthCare, Inc. (NASDAQ:TWHH), the holder of the senior debt, in connection
with the extension of the anticipated closing date of the Stock Purchase
Agreement, between Transworld and the Company, to January 10, 1997.

Health Management, Inc. is a national provider of integrated pharmacy management
services to patients with chronic medical conditions and to health care
professionals, drug manufacturers and third-party payers involved in their care.

                              # # #

For additional information:
At HMI:
Jim Nicol, President and CEO
847-913-2404

At Edelman Financial:
Diane Perry or Joe Kist 
212-704-8293 or 212-704-8239

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