Evaluating alternative risk adjusters for Medicare
Pope, G., Adamache, W., Walsh, E., & Khandker, R. K. (1998). Evaluating alternative risk adjusters for Medicare. Health Care Financing Review, 20(2), 109-129.
In this study the authors use 3 years of the Medicare Current Beneficiary Survey (MCBS) to evaluate alternative demographic, survey, and claims-based risk adjusters for Medicare capitation payment. The survey health-status models have three to four times the predictive power of the demographic models. The risk-adjustment model derived from claims diagnoses has 75-percent greater predictive power than a comprehensive survey model. No single model predicts average expenditures well for all beneficiary subgroups of interest, suggesting a combined model may be appropriate. More data are needed to obtain stable estimates of model parameters. Advantages and disadvantages of alternative risk adjusters are discussed