Is Medicare Advantage risk adjustment fair? And if not, what should we do about it?

While most patients in Medicare use the traditional fee-for-service route, a growing percentage of Medicare beneficiaries are relying on managed care plans through Medicare Advantage.  Medicare Advantage provides beneficiaries with additional choice and also serves as a competitive alternative to traditional Medicare.  In theory, Medicare should just allocate a beneficiary’s funding to a managed care…

What are regression trees?

Regression trees are a way to partition your explanatory variables to (potentially) better predict an outcome of interest.  Regression trees start with a an outcome (let’s call it y) and a vector of explanatory variables (X).   Simple Example For instance, let y be health care spending, X=(X1,X2) where X1 is the patient’s age and X2 is the patient’s…

Measuring Patient Case Mix in Medicare

How does Medicare measure patient case mix?  For the most part, Medicare uses the Hierarchical Condition Category (HCC) model.  A recent CMS presentation describes the HCC model in more detail.  Today I review where CMS applies the HCC model, provide an overview of the HCC methodology, briefly describe its performance, and give some background on…

Risk Scores and provider size

At a recent AcademyHealth presentation, Cheryl Damberg discussed her research to design a P4P program for implementation for Integrated Healthcare Association (IHA).  One thing I noticed about the presentation was that smaller provider groups had patients with lower risk scores (i.e., healthier patients).  Is it really the case that small providers treat much healthier patients?…

Problems with Risk Adjustment

To evaluate providers based on the health outcomes or the cost of care, one must attempt to evaluate dimensions of care which are strictly within the providers control. For instance, if a physicians treats two patients with breast cancer, but one patient has a more advanced form of breast cancer, one should take this difference…