Overview of Risk Adjustment and Outcome Measures for Home Health Agency OBQI Reports: Highlights of Current Approaches and Outline of Planned Enhancements1, 2

The purposes of this document are (1) to briefly discuss outcome measurement, risk adjustment, and the rationale for risk adjusted outcome reporting in the context of outcome-based quality improvement (OBQI) for home health care, and (2) to summarize the current risk adjustment and outcome measurement approaches as well as plans for their continued refine ment. Except for Section 1 and the first component of Section 2, this overview is intended for a somewhat technically inclined audience. Nonetheless, it should be useful to those with little or no research or statistical experience. For such individuals, an intuitive sense of the risk adjust ment methods can be acquired by simply reading the narrative and skimming through the material that is more technical in nature. In Sections 5 and 6, background information on outcome measures and OBQI is presented in order to provide contextual information that is relevant to understanding the applications of the statistical risk adjustment methods summarized here. 1. What Risk Adjustment Is and Why It Is Needed Suppose the hospitalization rate is 20 % for one home health agency and 30 % for another. On the basis of these statistics alone, one might conclude that the second agency provide