Risk adjustment in a non-market-based system: the case of Emilia-Romagna, Italy
by Kenneth D. Smith, Elaine J. Yuen, Daniel Z. Louis, Carol Rabinowitz, Vittorio Maio, Masahito Jimbo, Andrea Donatini, Francesco Taroni
International Journal of Healthcare Technology and Management (IJHTM), Vol. 7, No. 1/2, 2006

Abstract: Risk adjustment is a useful tool for setting budgets in non-market-based healthcare systems. This paper develops a prospective risk adjuster for 4 million residents of Regione Emilia-Romagna, Italy. The risk adjuster predicts hospital and pharmacy costs based on clinical information collected in the prior year in 114 Disease Staging Groups based upon hospital data and 31 Chronic Condition Drug Groups based upon pharmacy data. For the prospective risk adjuster, model R-squareds of 7.8% for hospital costs and 25.3% for pharmacy costs is reported. The risk adjuster is evaluated on individual and group predictive accuracy and ways to use the adjuster as a budgeting tool during negotiations between local health unit and district managers are discussed.

Online publication date: Thu, 29-Sep-2005

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