BACKGROUND: Prolonged acute hospital stays are a problem for older people and for health services. Failure to effectively manage the psychological and social aspects of illness is an important cause of prolonged hospital stay. Proactive Psychological Medicine (PPM) is a new way of providing psychiatry services to medical wards which is proactive, focussed, intensive and integrated with medical care. The primary aim of PPM is to reduce the time older people spend in hospital because of unmanaged psychological and social problems. The HOME Study will test the effectiveness and cost-effectiveness of PPM. METHODS/DESIGN: The study is a two-arm, parallel-group, randomised, controlled superiority trial with linked health economic analysis and an embedded process evaluation. The target population is people aged 65 years and older admitted to acute hospitals. Participants will be randomly allocated to either usual care plus PPM or usual care alone. The primary outcome is the number of days spent as an inpatient in a general hospital in the month following randomisation. Secondary outcomes include quality of life, cognitive function, independent functioning, symptoms of anxiety and depression, and experience of hospital stay. The cost-effectiveness of usual care plus PPM compared with usual care alone will be assessed using quality-adjusted life-years as an outcome as well as costs from the NHS perspective. DISCUSSION: This update to the published trial protocol gives a detailed plan of the statistical and economic analysis of The HOME Study. TRIAL REGISTRATION: ISRCTN registry, ISRCTN86120296. Registered on 3 January 2018.