Risk adjustment: the missing piece of market competition

This DataWatch describes the process adopted by The Health Insurance Plan of California (The HIPC) for assessing and adjusting for health risk differences among participating health plans. We also report on the results of the 1996 risk assessment/adjustment calculations. A risk assessment value is c...

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Bibliographic Details
Published in:Health Affairs 1996, Vol.15 (1), p.171-181
Main Authors: Shewry, S, Hunt, S, Ramey, J, Bertko, J
Format: Article
Language:English
Subjects:
Adjustment
California
Competition
Cost Control - trends
Costs
Design
Employers
Group health insurance
Group insurance
Health Benefit Plans, Employee - economics
Health care industry
Health care policy
Health insurance
Health risk assessment
Health risks
Humans
Managed Competition - economics
Marketing
Mathematical analysis
Mental health
Reforms
Risk adjustment
Risk assessment
Risk Management - economics
State Health Plans - economics
Statistical analysis
Studies
Subscribers
Underwriting
United States
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Description
Summary:This DataWatch describes the process adopted by The Health Insurance Plan of California (The HIPC) for assessing and adjusting for health risk differences among participating health plans. We also report on the results of the 1996 risk assessment/adjustment calculations. A risk assessment value is calculated for each health plan based on the plan's enrollee mix as compared with the mix of enrollees in The HIPC as a whole. The results indicated that approximately 1 percent of total premium dollars needs to be transferred to bring all health plan scores within the acceptable level (+/- 5 percent) of risk distribution.
ISSN:0278-2715
1544-5208
DOI:10.1377/hlthaff.15.1.171