Evaluating nursing home performance indicators: an illustration exploring the impact of facilities on ADL change

PURPOSE: Performance measurement systems for nursing homes assume that facility performance contributes heavily to individual outcomes. This research illustrates how that assumption can be assessed using the change in residents' activities of daily living (ADLs). DESIGN AND METHODS: The data used in these analyses were all from residents with both an admission and a quarterly assessment in a sample of all admissions to a randomly chosen 10% of Medicare- or Medicaid-certified nursing homes operating during 2002. RESULTS: Models including both facility and individual variables explained up to 20% of the variation in ADL change after admission. Facility identity in isolation explained between 8% and 14% of the variation in ADL change. IMPLICATIONS: The results suggest that quality indicators based on change in ADLs may be problematic when used in nursing home performance measurement systems. More generally, the results recommend that the level of variation in performance measures attributable to facility identity or performance become a much more central consideration when researchers evaluate quality indicators for use in nursing home performance measurement systems.