scholarly journals How Does Risk Selection Respond to Risk Adjustment? New Evidence from the Medicare Advantage Program

2014 ◽  
Vol 104 (10) ◽  
pp. 3335-3364 ◽  
Author(s):  
Jason Brown ◽  
Mark Duggan ◽  
Ilyana Kuziemko ◽  
William Woolston

To combat adverse selection, governments increasingly base payments to health plans and providers on enrollees' scores from risk-adjustment formulae. In 2004, Medicare began to risk-adjust capitation payments to private Medicare Advantage (MA) plans to reduce selection-driven overpayments. But because the variance of medical costs increases with the predicted mean, incentivizing enrollment of individuals with higher scores can increase the scope for enrolling “overpriced” individuals with costs significantly below the formula's prediction. Indeed, after risk adjustment, MA plans enrolled individuals with higher scores but lower costs conditional on their score. We find no evidence that overpayments were on net reduced. (JEL G22, H51, I13, I18)

2006 ◽  
Vol 7 (Supplement) ◽  
pp. 75-91 ◽  
Author(s):  
Jacob Glazer ◽  
Thomas G. McGuire

Abstract In many countries, competition among health plans or sickness funds raises issues of risk selection. Funds may discourage or encourage potential enrollees from joining, and these actions may have efficiency or fairness implications. This article reviews the experience in the U.S., and comments on the evidence for risk selection in Germany. There is little evidence that risk selection causes efficiency problems in Germany, but risk selection does lead to an inequality in contribution rates. A simple approach to equalizing contribution rates that does not involve risk adjustment is presented and discussed.


2016 ◽  
Vol 74 (6) ◽  
pp. 736-749 ◽  
Author(s):  
Elizabeth M. Goldberg ◽  
Amal N. Trivedi ◽  
Vincent Mor ◽  
Hye-Young Jung ◽  
Momotazur Rahman

The 2003 Medicare Modernization Act (MMA) increased payments to Medicare Advantage plans and instituted a new risk-adjustment payment model to reduce plans’ incentives to enroll healthier Medicare beneficiaries and avoid those with higher costs. Whether the MMA reduced risk selection remains debatable. This study uses mortality differences, nursing home utilization, and switch rates to assess whether the MMA successfully decreased risk selection from 2000 to 2012. We found no decrease in the mortality difference or adjusted difference in nursing home use between plan beneficiaries pre- and post the MMA. Among beneficiaries with nursing home use, disenrollment from Medicare Advantage plans declined from 20% to 12%, but it remained 6 times higher than the switch rate from traditional Medicare to Medicare Advantage. These findings suggest that the MMA was not associated with reductions in favorable risk selection, as measured by mortality, nursing home use, and switch rates.


2011 ◽  
Author(s):  
Jason Brown ◽  
Mark Duggan ◽  
Ilyana Kuziemko ◽  
William Woolston

Circulation ◽  
2015 ◽  
Vol 132 (suppl_3) ◽  
Author(s):  
Alpesh Amin ◽  
Allison Keshishian ◽  
Lin Xie ◽  
Onur Baser ◽  
Kwanza Price ◽  
...  

Objective: The study aim was to compare major bleeding risk and health care costs after initiating oral anticoagulants (OACs) for treatment-naïve non-valvular atrial fibrillation (NVAF) patients. Methods: Patients in the Medicare advantage population prescribed apixaban, rivaroxaban, dabigatran or warfarin were selected from the Optum Research Database 01JAN2013-31DEC2014. The first OAC prescription date was designated as the index date. Patients were required to have a NVAF diagnosis, continuous health plan enrollment for 6 months and no OAC claims before the index date. Patients were classified into four cohorts based on their index OAC prescription. Major bleeding events, identified by the Cunningham algorithm plus additional bleeding sites, were compared using a Cox proportional hazards model. Health care costs were calculated per patient per month and compared using generalized linear models. Results: The study included 36,260 patients: 3,762 apixaban, 2,677 dabigatran, 8,740 rivaroxaban, and 21,081 warfarin patients. CHA2DS2-VASc score was higher in apixaban patients (4.2) compared to dabigatran and rivaroxaban (both 4.0; p<0.001), but lower than in warfarin patients (4.3; p<0.001). After adjusting for baseline characteristics, apixaban patients were significantly less likely to have a major-bleeding event within one year of treatment initiation compared to rivaroxaban (HR=0.69; 95% CI=0.59-0.81) and warfarin (HR=0.71; 95% CI=0.61-0.82) patients and trended towards numerically lower major bleeding compared to dabigatran patients (HR=0.87; 95% CI=0.72-1.06). Major bleeding-related medical costs were lower in apixaban patients ($53) compared to rivaroxaban ($111) and warfarin ($138) patients (p<0.001) and similar to dabigatran patients ($44, p=0.370). Furthermore, apixaban patients incurred lower all-cause medical costs ($1,646) compared to dabigatran ($1,974, p=0.02), rivaroxaban ($1,909, p=0.002) and warfarin ($2,162, p<0.001) patients. Conclusion: In a large national Medicare advantage population, treatment-naïve NVAF patients treated with apixaban were significantly less likely to have a major-bleeding event compared to those prescribed rivaroxaban or warfarin and had significantly lower medical costs.


2020 ◽  
pp. 1-16
Author(s):  
Ulrika Winblad ◽  
David Isaksson ◽  
Paula Blomqvist

Abstract A primary care choice reform launched in Sweden in 2010 led to a rapid growth of private providers. Critics feared that the reform would lead to an increased tendency among new, profit-driven, providers, to select patients with lower health risks. Even if open risk selection is prohibited, providers can select patients in more subtle ways, such as establishing their practices in areas with higher health status. This paper investigates to what extent strategies were employed by local governments to avoid risk selection and whether there were any differences between left- and right-wing governments in this regard. Three main strategies were used: risk adjustment of the financial reimbursements on the basis of health and/or socio-economic status of listed patients; design of patient listing systems; and regulatory requirements regarding the scope and content of the services that had to be offered by all providers. Additionally, left-wing local governments were more prone than right-wing governments to adopt risk adjustment strategies at the onset of the reform but these differences diminished over time. The findings of the paper contribute to our understanding of how social inequalities may be avoided in tax-based health care systems when market-like steering models such as patient choice are introduced.


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