Chapter 10 Risk adjustment Flashcards Preview

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Flashcards in Chapter 10 Risk adjustment Deck (22):

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?

-Is the insured peril related to mortality, morbidity or retrenchment?
-What is the time frame under consideration eg during acute in-hospital admission, next month or year?
-What population is being considered? eg in-hospital, paediatric patients, etc
-What is the purpose eg pricing, contracting with healthcare provider


Example of risk factors?


clinical factors
-principal diagnosis
-severity of principal diagnosis
-mental health
-physical functional status
-acute physiological stability

health related
-tobacco use
-alcohol use
-sexual practices
-diet & nutrition

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

-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 ?

-measuring efficiency
-risk management
-measuring healthcare options
-provider profiling



-Many countries distribute hospital budgets according to underlying demand of patients in districts measured by diagnosis related groups.
-DRG are clinical classification systems used to risk-adjust hospital costs.
-Risk-adjustment models can be used to calculate expected cost of new group of lives purchasing PMI products


Measuring efficiency

-Adjusting for patient mix is necessary when comparing two hospital costs.
-Hopsital A may be getting more cases of neurosurgery than B hence higher average costs per admission.

-Comparing facility efficiency is useful for:
-price negotiations for purchasers
-network selection
-managing facilities efficiently


Risk management

-when healthcare budget is exceeded it is important to know whether this is due to demand or supply side factors.

-Appropriate risk management strategies can then be devised to curtail cost increases.


Measuring healthcare outcomes

-Measuring healthcare quality is important because value is both a function of cost efficiency and quality.


Provider profiling

-in order to support sustainable healthcare insurers both locally and internationally share information with doctors on their generated costs compared to their peers on like-for-like basis (i.e. risk adjusted).
-this information increases awareness amongst doctors on the economic impact of their clinical decisions.


Common population classification systems

-numerous off-the-shelf classification systems can be used for risk adjustment.
-software packages typically require demographic info and clinical diagnosis.


Case mix index formula

=Sum of admission cost weighs/count of admissions