Chapter 10 Risk adjustment Flashcards
-Evaluate the nature of risk facing the insurer. -Describe the principal modelling techniques appropriate to health and care insurance.
What is risk adjustment?
- evaluation of utilisation levels and and/or cost is essential to understand the underlying factors influencing demand factors.
- Adjusting for these underlying demand factors is referred to as risk adjustment.
Choosing risk-adjustment method requires what considerations?
- PERIL (Is the insured peril related to mortality, morbidity or retrenchment?)
- TIME FRAME (What is the time frame under consideration eg during acute in-hospital admission, next month or year?)
- POPULATION (What population is being considered? eg in-hospital, paediatric patients, etc)
- PURPOSE (What is the purpose eg pricing, contracting with healthcare provider?)
Example of risk factors?
demographics
- age
- gender/sex
- race
clinical factors
- principal diagnosis
- severity of principal diagnosis
- metal health
- physical functional status
- acute physiological stability
health related
- tobacco use
- alcohol use
- sexual practices
- diet & nutrition
- obesity
Socio economic factors
- educational attainment
- housing characteristics
- health insurance coverage
- cultural beliefs
Attitudes & perceptions
- overall health status
- religious behaviours
- references and expectations for health care services
Risk factors can be classified into
- demographics
- clinical factors
- health-related behaviours
- socio-economic factors
- attitudes and perceptions
Risk factor: age
-ability of human body to recover from illnesses reduces with age.
Risk factor: gender
- Certain clinical conditions are sex specific.
- male - prostate cancer
- femaile breast cancer
Risk factor: race
- well-documented differences exist in disease prevalence by race.
- once adjusted for socio-economic factors, disparities in healthcare between different enthic groups are greatly reduced,but still not elimininated.
Risk factor: acute clinical stability
- measure a person’s physiological functioning using homeostatic measures:
- heart rate, body temperature
- blood pressure
- this is needed to check if patient is facing imminent risk of death.
Risk factor: principal diagnosis
-It is often necessary to understand the extent & severity of a principal diagnosis eg type of bacterial or viral infection for a patient diagnosed with gastritis.
Risk factor: Co-morbidities
- refers to a clinical condition which exists simultaneously with another condition, usually independently of another medical condition.
- eg diabetes and a heart condition.
Risk factor: Functional status
- often referes to observable basic activities of daily living(ADL) and instrumental ADLs.
- ADL egs: feeding,washing, toileting
- instrumental ADLs : shopping, cooking
Risk factors:Socio-economic status
- Studies have shown that it is important to adjust for socio-economic factors when comparing healthcare outcomes.
- poor living standard and nutrition contribute to morbidity risk.
- doctors may keep patients with lower socio-economic status in hospitals longer they believe home conditions are not conducive for recuperation.
Risk factors: Lifestyle factors
- many lifestyle factors influence morbidity: eg alcohol use, smoking, use of illicit drugs.
- these can be closely linked with chronic conditions.
Access to benefits/insurance option
- access to benefit /insurance option is a critical factor in understanding the change in healthcare costs from one time period to the next.
- it may seem healthcare costs are decreasing over time but it means policyholders just chose cheaper insurance options with less comprehensive cover.
Risk adjustment is useful for ?
- budgeting
- measuring efficiency
- risk management
- measuring healthcare outcomes
- provider profiling
