Chapter 10 - Risk adjustment

Question 1

Demographic risk adjustment factors

Answer 1

RAG

• Race and ethnicity
• Age
• Gender

Question 2

Clinical risk adjustment factors

Answer 2

SPACE PM

• SEVERITY of principal diagnosis
• PRINCIPLE diagnosis
• ACUTE physiologic stability
• COGNITIVE status
• EXTENT and severity of co-morbidities
• PHYSICAL functional status
• MENTAL health

Question 3

Health-related behaviour risk adjustment factors

Answer 3

ADIOS T

• ALCOHOL use
• DIET and nutrition
• use of ILLICIT drugs
• OBESITY and being overweight
• SEXUAL practices
• TOBACCO use

Question 4

Socio-economic risk adjustment factors

Answer 4

HEE CHEF

• HOUSING and neighbourhood characteristics
• EDUCATIONAL attainment, health literacy
• ECONOMIC resources
• CULTURAL beliefs and behaviours
• HEALTH insurance coverage
• EMPLOYMENT and occupation
• FAMILIAL characteristics and household compositions

Question 5

Attitudes and perceptions risk adjustment factors

Answer 5

• OVERALL health status and quality of life
• RELIGIOUS beliefs and behaviours
• REFERENCE and expectations for health care services

Question 6

How can risk adjustments help with budgeting of State and pricing in insurance?

Answer 6

• Many hospitals distribute budgets according to the underlying demand of patients in districts measured by diagnosis-related groups. DRGs are common clinical classification systems used to risk-adjust hospital costs
• Risk-adjustment models can assist in quantifying the expected healthcare costs of a new group of lives purchasing PMI, as well as the required levels of risk reserves

Question 7

Equation to calculate Case mix index

Answer 7

Case mix index = (Sum of admission cost weights)/(Count of admissions)

(Theoretical cost weight x Number of admissions) / (total number of admissions)

Question 8

Is it true that the higher the case mix index, the higher the cost

Answer 8

Yes

Question 9

How to calculate the most cost-efficient hospital

Answer 9

Sum of Average cost per admission / Case mix index

Question 10

What is risk adjustment useful for

Answer 10

PROBE

• PROVIDER profiling (sharing info between doctors on a risk-adjusted basis increases awareness of the economic impact of clinical decisions)
• RISK management ( if budgets are exceeded it is important to understand whether this is due to supply or demand factors
• measuring healthcare OUTCOMES (eg. readmission rates, or patient satisfaction scores)
• BUDGETING ( eg funding may be distributed by diagnosis-related groups)
  – help pricing and reserving in insurance
• measuring EFFICIENCY ( useful for price negotiations, network selection or insurance plans and managing facilities)

Question 11

What is a case mix index

Answer 11

• A cost/ case weight of a DRG (diagnosis related group) is the multiplicative factor of how much more expensive or cheaper the average cost of the DRG is relative to the overall cost of hospital admissions in the time period

Question 12

Case weight ( Cost weight ) formula

Answer 12

cost per claimant / average cost per claimant