Hybrid risk adjustment for pharmaceutical benefits

Is there one measure-of-fit that fits all? A taxonomy and review of measures-of-fit for risk-equalization models

This study provides a taxonomy of measures-of-fit that have been used for evaluating risk-equalization models since 2000 and discusses important properties of these measures, including variations in analytic method. It is important to consider the properties of measures-of-fit and variations in analytic method, because they influence the outcomes of evaluations that eventually serve as a basis for policymaking. Analysis of 81 eligible studies resulted in the identification of 71 unique measures that were divided into 3 categories based on treatment of the prediction error: measured based on squared errors, untransformed errors, and absolute errors. We conclude that no single measure-of-fit is best across situations. The choice of a measure depends on preferences about the treatment of the prediction error and the analytic method. If the objective is measuring financial incentives for risk selection, the only adequate evaluation method is to assess the predictive performance for non-random groups.

Pharmaceutical cost management in an ambulatory setting using a risk adjustment tool

Background

Pharmaceutical expenditure is undergoing very high growth, and accounts for 30% of overall healthcare expenditure in Spain. In this paper we present a prediction model for primary health care pharmaceutical expenditure based on Clinical Risk Groups (CRG), a system that classifies individuals into mutually exclusive categories and assigns each person to a severity level if s/he has a chronic health condition. This model may be used to draw up budgets and control health spending.

Methods

Descriptive study, cross-sectional. The study used a database of 4,700,000 population, with the following information: age, gender, assigned CRG group, chronic conditions and pharmaceutical expenditure. The predictive model for pharmaceutical expenditure was developed using CRG with 9 core groups and estimated by means of ordinary least squares (OLS). The weights obtained in the regression model were used to establish a case mix system to assign a prospective budget to health districts.

Results

The risk adjustment tool proved to have an acceptable level of prediction (R² ≥ 0.55) to explain pharmaceutical expenditure. Significant differences were observed between the predictive budget using the model developed and real spending in some health districts. For evaluation of pharmaceutical spending of pediatricians, other models have to be established.

Conclusion

The model is a valid tool to implement rational measures of cost containment in pharmaceutical expenditure, though it requires specific weights to adjust and forecast budgets.

Pathways towards chronic care-focused healthcare systems: evidence from Spain

Increasing healthcare expenditure is a matter of concern in many countries, particularly in relation to the underlying drivers of such escalation that include ageing, medical innovation, and changes in the burden of disease, such as the growing prevalence of chronic diseases. Most healthcare systems in developed countries have been designed to 'cure' acute episodes, rather than to 'manage' chronic conditions, and therefore they are not suitably or efficiently organized to respond to the changing needs and preferences of users. New models of chronic care provision have been developed to respond to the changing burden of disease and there is already considerable practical experience in several different countries showing their advantages but also the difficulties associated with their implementation. In this paper, we focus on the Spanish experience in terms of policy changes and pilot studies focused on testing the feasibility of moving towards chronic care models. In particular, we discuss a framework that identifies and analyses ten key prerequisites to achieving high performing chronic care-based healthcare systems and apply it to the current Spanish National Health System (NHS). We find that the design of the Spanish NHS already meets some of these pre-requisites. However, other features are still in their early stages of development or are being applied only in limited geographical and clinical contexts. We outline the policies that are being implemented and the pathway that the Spanish NHS is taking to address the crucial challenge of the transition towards an optimal health system focused on chronic care. Given the current evidence and trends, we expect that the pathway for developing a chronicity strategy being followed by the Spanish NHS will significantly transform its current healthcare delivery model in the next few years.

Estimates of patient costs related with population morbidity: can indirect costs affect the results?

A number of health economics studies require patient cost estimates as basic information input. However, the accuracy of cost estimates remains generally unspecified. We propose to investigate how the allocation of indirect costs or overheads can affect the estimation of patient costs and lead to improvements in the analysis of patient cost estimates. Instead of focussing on the costing method, this paper will highlight observed changes in variation explained by a methodology choice. We compare four overhead allocation methods for a specific Spanish population adjusted using the Clinical Risk Groups model. Our main conclusion is that the amount of global variation explained by the risk adjustment model depends mainly on direct costs, regardless of the cost allocation methodology used. Furthermore, the variation explained can be slightly increased, depending on the cost allocation methodology, and is independent of the level of aggregation in the classification system.

[Identification of pharmacy cost outliers in primary care]

OBJECTIVE

To identify pharmacy cost outlier patients in Primary Care, describing epidemiological differences between normal users and outliers; and to study the explanatory power of risk adjustment tools based on Adjusted Clinical Groups (ACG) as regards the variability of pharmacy expenditure for both groups of patients.

DESIGN

Observational, retrospective study.

SETTING

23 health centres located in the regions of Aragon, Catalonia and the Balearic Islands.

PARTICIPANTS

The study sample consisted of 286,450 patients who were seen at least once in 2005.

MEASUREMENTS

Variables related to demographic features, pharmacy cost, and case-mix (ACG 7.1) were collected. Pharmacy cost outliers were selected according to the inter-quartile range method. A linear regression model was developed to measure the explanatory power of ACG. This same model was applied stratifying the population by variables of the physician, the health centre and the region.

RESULTS

One out of ten patients was classified as an outlier. This group was responsible for 60% of the total pharmacy expenditure. These outlier patients were 26.3 years older than normal users and had a higher comorbidity. The explanatory power of the ACG classification system was markedly lower -3% vs. 26.4% for normal users-.

CONCLUSIONS

Further research should be done on factors causing a lack of adequacy of ACG among pharmacy outlier patients. Although it could be thought that social circumstances might play a role in the clinical state of patients, it is more likely that the applied trimming method does not allow outliers with justifiable clinical reasons for higher costs to be distinguished from those without them.