Chapter 10: Risk adjustment Flashcards
Why is risk adjustment necessary?
Necessary in order tocompare healthcare costs and outcomes on a like-for-like basis
healthcare costs and outcomes are expected to vary between individuals based on their risk profile, factorsaffecting risk profile include:
demographic factors (age, gender, race, geographic location)
clinical factors (chronic status, high blood pressure, high cholesterol, obesity, bmi)
socio-economic factors (income, education, employment)
attitudes and perceptions
burden of disease in population
risk adjustmentshould only be applied to demand side factors outside the control of the provider
supply side factors (within the provider’s control) can also impact healthcare costs and outcomes, but should not be adjusted for:
For exampleavailability of staff, beds, technology. However, theseshould be considered when it comes to quality of care
List6 potential applications of risk adjustment
budgeting by the State:
funding may be distributed by diagnosis related groups
pricing and reserving for PMI insurers
risk management:
if budgets are exceeded it is important to understand whether this is due to demand or supply factors
measuring healthcare outcomes:
eg hospital readmission rates, patient satisfaction scores
provider profiling:
sharing information between doctors on a risk-adjusted basis increases awareness of the economic impact of clinical decisions
measuring efficiency:
useful for price negotiations, network selection
List 2 data items that may be needed when determining a hospital case mix index
date and duration of admission
Explain the use of a case mix index
case mix reflects the severity of each case on a risk-adjusted basis
For example, it can reflect the relative cost of a DRG (applying to medical fund) relative to the overall average cost (applying to national hospitalisation)
Calculation example:
We divide actual average cost per admission by a case mix index
case mix index = sum ( admissions *cost weight(theoretical) ) / sum ( admissions )
