This study prospectively investigated the effect of continuity of primary physician care on functional ability and outcome of nursing home patients transferred to a community hospital. Evaluated were 335 consecutive transfers with concurrent chart review and a standardized functional rating scale on admission and discharge from the hospital. Continuity of care by the primary physician was more likely with a greater length of stay. There was no association of continuity with age, sex, initial functional status or mental status of the patient, type of admission, or payment source. No significant relationship was found between outcome and continuity of care by the primary physician. Logistic regression analysis indicated that emergency admission to the hospital conferred an increased risk of mortality but that the level of primary physician continuity did not.