Shrinkage Estimators for a Composite Measure of Quality Conceptualized as a Formative Construct
Article first published online: 20 JUN 2012
© Health Research and Educational Trust
Health Services Research
Volume 48, Issue 1, pages 271–289, February 2013
How to Cite
Shwartz, M., Peköz, E. A., Christiansen, C. L., Burgess, J. F. and Berlowitz, D. (2013), Shrinkage Estimators for a Composite Measure of Quality Conceptualized as a Formative Construct. Health Services Research, 48: 271–289. doi: 10.1111/j.1475-6773.2012.01437.x
- Issue published online: 7 JAN 2013
- Article first published online: 20 JUN 2012
- Composite measures;
- Bayesian models;
- quality indicators
To demonstrate the value of shrinkage estimators when calculating a composite quality measure as the weighted average of a set of individual quality indicators.
Rates of 28 quality indicators (QIs) calculated from the minimum dataset from residents of 112 Veterans Health Administration nursing homes in fiscal years 2005–2008.
We compared composite scores calculated from the 28 QIs using both observed rates and shrunken rates derived from a Bayesian multivariate normal-binomial model.
Shrunken-rate composite scores, because they take into account unreliability of estimates from small samples and the correlation among QIs, have more intuitive appeal than observed-rate composite scores. Facilities can be profiled based on more policy-relevant measures than point estimates of composite scores, and interval estimates can be calculated without assuming the QIs are independent. Usually, shrunken-rate composite scores in 1 year are better able to predict the observed total number of QI events or the observed-rate composite scores in the following year than the initial year observed-rate composite scores.
Shrinkage estimators can be useful when a composite measure is conceptualized as a formative construct.