BACKGROUND: Australia's ageing population means that there is increasing emphasis on developing innovative models of health care delivery for older adults. The assessment of the most appropriate mix of services and measurement of their impact on patient outcomes is challenging. The aim of this evaluation was to describe the health related quality of life (HRQoL) of older adults with complex needs and to explore the relationship between HRQoL, readmission to acute care and survival. METHODS: The study was conducted in metropolitan Melbourne, Australia; participants were recruited from a cohort of older adults enrolled in a multidisciplinary case management service. HRQoL was measured at enrolment into the case-management service using The Assessment of Quality of Life (AQoL) instrument. In 2007-2009, participating service clinicians approached their patients and asked for consent to study participation. Administrative databases were used to obtain data on comorbidities (Charlson Comorbidity Index) at enrolment, and follow-up data on acute care readmissions over 12 months and five year mortality. HRQoL was compared to aged-matched norms using Welch's approximate t-tests. Univariate and multivariate logistic regression models were used to explore which patient factors were predictive of readmissions and mortality. RESULTS: There were 210 study participants, mean age 78 years, 67% were female. Participants reported significantly worse HRQoL than age-matched population norms with a mean AQOL of 0.30 (SD 0.27). Seventy-eight (38%) participants were readmitted over 12-months and 5-year mortality was 65 (31%). Multivariate regression found that an AQOL utility score <0.37 (OR 1.95, 95%CI, 1.03 - 3.70), and a Charlson Comorbidity Index ≥6 (OR 4.89, 95%CI 2.37 - 10.09) were predictive of readmission. Multivariate analysis demonstrated that age ≥80 years (OR 7.15, 95%CI, 1.83 - 28.02), and Charlson Comorbidity Index ≥6 (OR 6.00, 95%CI, 2.82 - 12.79) were predictive of death. CONCLUSION: This study confirms that the AQoL instrument is a robust measure of HRQoL in older community-dwelling adults with chronic illness. Lower self-reported HRQoL was associated with an increased risk of readmission independently of comorbidity and kind of service provided, but was not an independent predictor of five-year mortality.