Unbiased Analysis of Today's Healthcare Issues
Many countries allow private plans to administer health insurance benefits but with restrictions on premiums and with the potential for risk adjusted government payments based on the health of a health plan pool For instance, Belgium , Germany, Israel, the Netherlands and Switzerland all have mandatory health insurance schemes; Ireland and Australia have voluntary health…
If you want to implement value-based care, you need to define what a ‘good’ outcome is. A good outcome may be different for different individuals. For instance, if you look at mortality rates for a given disease, it makes sense that individuals age 80 and above will have higher mortality rates than those 20-29 year…
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…
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…
What is the key driver of regional variation in Medicare spending? According to a paper by Reschovsky Hadley, and Romano (2013), the answer is regional variation in patient health. Two key casemix adjustment methods—controlling for patient conditions obtained from diagnoses on claims and expenditures of those at the end of life—were evaluated. We failed to…
Medicare beneficiaries have the option to enroll in private plans to have them operate their benefits rather than use the tradiational Medicare Fee-for-services (FFS) program. Medicare pays these private plans, known as Medicare Advantage (MA) plans, premiums based on the health status of their enrollees. Medicare uses a risk score to measure beneficiary health status.…
Oftentimes, researchers will use an existing risk adjustment model and apply it to new data. The question is, which risk adjustment model should be used? The most popular method is to calibrate the model (i.e., estimate model parameters or coefficients) using one sample and validate the model using a separate data file. This standard approach,…
When creating risk adjustment models to predict health care spending, many researchers aim to maximize the goodness-of-fit of the model. Maximize the goodness of fit, however, can produce the problem of overfitting. Overfitting occurs when a model describes random error or noise instead of the underlying relationship. Overfitting generally occurs when a model is excessively…
You are the CEO of a health plan with millions of beneficiaries. If you have a demographic and health status information on these beneficiaries, can you predict how much each beneficiary will cost you? If so, how accurate will your prediction be? Most likely, you will use a risk adjustment model to predict how much…
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…