We establish the potential for outcomes evaluation of a long-term care population-based dataset. Data come from the Health Care Financing Administration's case-mix and quality demonstration project including all Medicare/ Medicaid certified homes of five U.S. states during 1992–1994. Using the Minimum Data Set, we identified nearly 70,000 residents over 65 years of age with congestive heart failure. We provide a preliminary analysis of pharmacotherapy of congestive heart failure and its effects on decline in physical functioning. Functional outcome, expressed as the rate of ADL decline, was improved for patients on combination therapy relative to those on digoxin or ACE-inhibitors alone. The availability of a population-based data set provides a means of evaluating current policies and practices.