An Examination of Methods for Risk-Adjustment of Rehospitalization Rates

This study examines three methods of conducting risk-adjustment to determine if the choice of method results in different conclusions about comparative mental health center performance. The three methods of risk-adjustment are stratification-weighting, logistic regression without interaction effects, and logistic regression with interaction effects. The dependent variable of interest is psychiatric rehospitalization within 14–60 days of discharge to a community mental health center. Subjects are adults discharged in fiscal year 1998 from inpatient psychiatric care to a designated community mental health center in Oklahoma. Using each method, we examine the mental health centers to determine whether their rehospitalization rates are significantly greater than, less than, or not different from, expected. Results show that, for some agencies, method of risk adjustment leads to different conclusions about center performance. Results are discussed with respect to identifying the preferred method of risk-adjustment, study limitations, and next steps in developing risk-adjustment technology and applications.