Disparities and Risk Adjustment

 

Risk adjustment describes an approach to P4P that acknowledges differences in patient populations by modifying the P4P measurement thresholds. This is typically done by lowering the bar to reward clinicians serving patient populations with predictably worse outcomes. Although risk adjustment for underlying medical conditions is the norm for quality measurement within cardiovascular surgery, risk adjustment for socioeconomic factors is one of the most controversial issues surrounding P4P.

It is generally accepted that low socioeconomic status (SES) is associated with poorer patient outcomes (47). Currently, few if any P4P programs in the United States risk adjust for socioeconomic factors. However, the United Kingdom, the Netherlands, and New Zealand all risk adjust for socioeconomic factors (242). In this section, Werner (233) and Tucker (220) discuss evidence that safety-net hospitals with P4P programs may exacerbate disparities. Additionally, Landon (53) shows that on average, Medicaid enrollees receive lower quality care scores.

Should P4P programs risk adjust for socioeconomic factors? The resounding answer from the medical literature is yes (89, 92, 93, 94, 95, 100, 123, 186, 202). Jotkowitz (95) suggests that SES should be used to adjust, while Hood (107) and Mehta (295) take it one step further by suggesting that disparities should be factored into quality and process measures. Present on admission (POA) codes can help risk adjust as well (260).

What will P4P do to the disparities gap? Rasmussen (109) argues it will worsen it, while Knottnerus (122) and Coleman (297) show how P4P could be used to remedy disparities. The United Kingdom uses a program called exception reporting to help combat disparities for high-risk patients. Doran (186) argues for the necessity of such exceptions. Shen (241) produced the first major study showing selection bias against severely chemically dependent patients in a treatment center after the implementation of a P4P program.

The consequence of not acknowledging disparities may be detrimental to low SES patients. Risk adjustment is a controversial issue that strikes core principles of P4P, clinician accountability, and quality improvement.

 


Disparities and Risk Adjustment Literature
 

(47) AHRQ Reports Health Care Quality Improves a Bit; Disparities in Care Continue. AAFP News Now. April, 2007.

Link: http://www.aafp.org/online/en/home/publications/news/news-now/health-of-...

Summary:

  • Article highlights recent reports that quality is improving, but disparities have not improved.
  • Highlights need for health insurance as biggest factor in improving disparities.

Significance to Literature:

P4P must consider disparities and uninsured.

 

Key Article

(53) Landon et al. Quality of Care in Medicaid Managed Care and Commercial Health Plans. JAMA. 2007: 298(14) 1674-1681.

PMID: 17925519

Summary:

  • Comparison of Medicaid and commercial managed care patients using 11 HEDIS quality indicators.
  • Medicaid managed enrollees receive lower quality care than commercial managed enrollees on 10 of the 11 measures.
  • These results are independent of type of insurance brand.

Significance to Literature:

Underscores the difficulty of delivering high-quality care to Medicaid patients.

 

(89) Shishehbor MH, Litaker D, Pothier CE, Lauer MS. Association of Socioeconomic Status With Functional Capacity, Heart Rate Recovery, and All-Cause Mortality. JAMA 2006: 295(7): 784-792.

PMID: 16478901

Summary:

  • Prospective cohort study in Ohio, evaluated physiologic characteristics of heart rate recovery in different socioeconomic areas.
  • Abnormal heart rate recovery was strongly associated with socioeconomic status.

Significance to Literature:

Evidence that P4P requires socioeconomic risk adjustment.

 

(91) Adair R, Greminger A, Post, B. Access to Health Care. Minnesota Medicine. April, 2006.

Link: http://www.minnesotamedicine.com/PastIssues/April2006/ClinicalAdairApril...

Summary:

  • A survey was distributed to patients at a free clinic in Minneapolis, MN and a pay for service clinic that asked about insurance status.
  • Questions the assumption that the uninsured are unemployed, or refuse insurance.
  • 575 respondents, half of which were uninsured.
  • People that were uninsured avoided the doctor more, skipped medications, were younger, and lived in suburbs.
  • 74% of uninsured had full-time employment, but were not offered insurance. 18% were full-time students.

Significance to Literature:

Provides demographic data about uninsured patients in urban areas. May contribute to risk adjustment formula.

 

(92) Gelberg L, Browner CH, Lejano E, Arangua L. Access to Women’s Health Care: A Qualitative Study of Barriers Perceived by Homeless Women. Women & Health. 2004; 40: 2, 87-99.

PMID: 15778140

Summary:

  • Accounts of 47 homeless women about their homelessness and access to medical care.
  • Discusses many of the sexual and reproductive barriers for homeless women.

Significance to Literature:

One of very few publications about homeless women’s health issues. May contribute to risk adjustment.

 

(93) Franzini L, Caughy M, Spears W, Esquer MEF. Neighborhood economic conditions, social processes, and self-rated health in low-income neighborhoods in Texas: A multilevel latent variables model. Social Science and Medicine. 2005: 61: 1135-1150.

PMID: 15970226

Summary:

  • Paper explores the relationship between neighborhood poverty and self-rated health within different communities in Texas.
  • Suggests social processes/support to improve individual health.

Significance to Literature:

Shows socioeconomic status affects self-rated health. May contribute to risk adjustment.

 

(94) Wen M, Cagney KA, Christakis NA. Effect of specific aspects of community social environment on the mortality of Individuals diagnosed with serious illness. Social Science and Medicine. 2005: 61: 1119-1134.

PMID: 15970225

Summary:

  • Examines mortality amongst seriously ill Chicago elderly with varying socioeconomic status.
  • Advantageous socioeconomic status lowered mortality.
  • Civic involvement and social support did not affect mortality.

Significance to Literature:

Further shows socioeconomic status affects health outcomes. May contribute to risk adjustment.

 

(95) Jotkowitz AB, et. al. Do Patients with Diabetes and Low Socioeconomic Status Receive Less Care and Have Worse Outcomes? A National Study. The American Journal of Medicine. 2006: 119(8), 665-669.

PMID: 16887412

Summary:

  • Assesses the influence of socioeconomic status on patients with diabetes in Israel.
  • Even in a country with universal healthcare, lower socioeconomic status patients with diabetes still had problems meeting their target treatment goals.

Significance to Literature:

Socioeconomic status is a more appropriate P4P risk adjustment factor than insurance status.

 

(100) Trivedi AN, Zaslavsky AM, Schneider EC, Ayanian JZ. Relationship Between Quality of Care and Racial Disparities in Medicare Health Plans. JAMA. 2006: 296(16) 1998-2004.

PMID: 17062863

Summary:

  • Demonstrates poor correlation between quality care and outcomes. Suggests racial disparities might explain differences in outcomes.

Significance to Literature:

Calls for research on racial disparities and outcomes. May contribute to risk adjustment. Distinguishes between health and health care.

 

Key Article

(107) Hood, RG. Pay-for-Performance—Financial Disparities and the impact on Healthcare Disparities. Journal of the National Medical Association. 2007: 99(8) 953-958.

PMID: 17722677

Summary:

  • Provides 9 inequities (reasons why P4P is unfair) for providers treating high-risk minority populations.
  • Provides 5 lessons and recommendations to overcome the above inequities and ultimately health care disparities.
  • P4P can be utilized to close the disparities gap.

Significance to Literature:

Provides many examples of how disparities should be factored into quality measurements.

 

(109) Rasmussen K, Bratlid D. Quality or equality? The Norwegian experience with medical monopolies. BMC Health Service Research. 2007: 7(20).

PMID: 17302967

Summary:

  • Study found the greater the distance to a major medical center care, the less care patients received.
  • Monopolies are useful to maintain high quality care, but do this at the expense of geographic equality.

Significance to Literature:

If clinics serving rural and underserved patients close because they cannot compete within a performance-based system of reimbursement, their patients will likely receive less care rather than travel to higher performing medical centers.

 

(122) Knottnerus JA, Velden GHMT. Dutch Doctors and Their Patients—Effects of Health Care Reform in the Netherlands. NEJM. Perspective. 2007: 357(24) 2424-2426.

PMID: 18077806

Summary:

  • In 2006, the Netherlands implemented a new healthcare system, assigning medical primary care physicians to all citizens with mandatory insurance.
  • Over and above the standard capitated payment system, the new system adds fee-for-service payments for more complicated patients.
  • Consumers have responsibility to select the right health plan for self.
  • Physicians must demonstrate their engagement in quality-improvement to obtain financial compensation.
  • This has already benefited general practitioners in low-income areas because it allows for greater compensation for more complex cases.
  • Task force exist that prepares professional guidelines and performance indicators

Significance to Literature:

New Dutch system aims to promote primary care through enhanced payments for more complicated patients.

 

(123) Enthoven AC, Ven WPMMVD. Going Dutch—Managed-Competition Health Insurance in the Netherlands. NEJM. 2007: 357(24) 2421-2423.

PMID: 18077805

Summary:

  • After 20 years of research, in 2006 a new Dutch healthcare system was realized.
  • Mandatory insurance for all citizens, most insurers are private, but are heavily regulated.
  • Risk equalization is a pre-condition of the new system and is based on which patients are predicted to cost more.
  • Individuals and employers must contribute to a risk equalization fund.
  • The “Dutch model” was first designed and proposed for the United States, and similar proposals exist today.

Significance to Literature:

Risk-adjusted capitated medical homes may be a necessary component for P4P. It took the Dutch 20 years of research and a homogenous population to accurately risk-adjust a capitated primary care panel of patients.

 

Key Article

(186) Doran T, Fullwood C, Reeves D, Gravelle H, Roland M. Exclusion of Patients from Pay-for-Performance Targets by English Physicians. NEJM. 2008: 359(3) 274-284.

PMID: 18635432

Summary:

  • Article first discusses the three approaches to avoiding inappropriate treatment of patients when a quality indicator does not apply when other considerations must take precedence:
    • Risk-adjust
    • Maximum achievement thresholds
    • Exception reporting
  • Analysis of data from exception reporting in the UK, including financial gain analysis, and the effect of the characteristics of patients and medical practices.
  • The median rate of exceptions in 2005-2006 was 5.3%
  • Authors conclude that exception reporting has brought substantial benefits to P4P in the UK, and there is little evidence of gaming the system.
  • Exceptions accounted for about 1.5% of the cost of the P4P program in the UK.
  • Discusses the arguments for and against exception reporting.

Significance to Literature:

Exclusion of patients is necessary in P4P, This demonstrates a successful attempt to do so.

 

(202) Casalino LP, et al. Will Pay-For-Performance And Quality Reporting Affect Health Care Disparities? Health Affairs. 2007: 26(3) w405-w414.

PMID: 17426053

Summary:

  • “Paper describes ways in which P4P and public reporting programs may increase disparities, and suggests ways in which programs might be designed that will make them likely to reduce, or at least not increase, disparities.”
  • Suggests five ways in which P4P will increase disparities:
    • Reduction in income for physicians in minority communities
    • P4P programs are not culturally sensitive
    • “Teaching to the test” methods will prevent other health care considerations
    • Avoiding patients with lower quality scores
    • Minority patients are less likely to use public report cards
  • Suggests six ways P4P and public reporting programs can be used to reduce, or at least not increase, disparities.
  • Key point being using risk adjustment and stratified analyses

Significance to Literature:

Risk adjustment would reduce physicians' incentive to avoid low-scoring patients as well as provide patients access to quality improvement programs which would improve their care.

 

(210) Millett C, et al. Ethnic Disparities in Diabetes Management and Pay-for-Performance in the UK: The Wadsworth Prospective Diabetes Study. PLoS Medicine. 4(6) 1087-1093.

PMID: 17564486

Summary:

  • Paper looks at diabetes management in multiethnic populations before and after P4P in the UK.
  • The proportion of patients reaching treatment targets for HbA1c, blood pressure, and total cholesterol increased significantly after P4P implementation.
  • However, authors found disparities in prescribing and intermediate clinical outcomes to persist.

Significance to Literature:

This is one of the first studies to examine changes in diabetes management in multiethnic populations after P4P implementation.

 

(220) Tucker ME. P4P May Harm Safety-Net Hospitals. Family Practice News. June 1, 2008.

Link: http://www.familypracticenews.com/article/S0300-7073(08)70693-5/fulltext

Summary:

  • Author summarizes part of the conclusion from the hospital compare P4P program, which found the least improvement in hospitals with the highest proportion of Medicaid patients.

Significance to Literature:

“Efforts are needed to minimize the unintended consequences of P4P and public reporting.”

 

Key Article

(233) Werner RM, Goldman LE, Dudley RA. Comparison of Change in Quality of Care Between Safety-Net and Non-Safety-Net Hospitals. JAMA. 2008: 299(18) 2180-2187.

PMID: 18477785

Summary:

  • Authors sought to examine trends in disparities of the quality of care between hospitals with high (safety-net) and low (non-safety-net) percentages of Medicaid patients.
  • Non-safety-net hospitals improved their performance in AMI care significantly more than safety-net hospitals.
  • Safety-net hospitals are also more likely to receive smaller bonus payments and are more likely to incur penalties under P4P.
  • The CMS P4P program may exacerbate existing disparities.

Significance to Literature:

The combination of lower baseline performance and smaller gains in safety-net hospitals suggests disparities in quality of care are increasing.

 

Key Article

(241) Shen Y. Selection Incentives in a Performance-Based Contracting System. Health Services Research. 2003: 38(2) 535-552.

PMID: 12785560

Summary:

  • Author investigated whether a P4P program provided incentives for a nonprofit substance abuse treatment center to treat less severe clients.
  • P4P was implemented in the study group (OSA) but not in the control group (Medicaid).
  • Prior to the implementation of P4P the study group had 11% more severe cases than the control group, whereas after three years of P4P, the study group had 28.5% fewer severe cases than the control group.
  • Study identifies “the selection effect” as just one unintended consequence of P4P.

Significance to Literature:

First study to show major selection bias likely resulting from the implementation of a P4P program.

 

(242) Satin DJ. Paying Physicians and Protecting the Poor. Minnesota Medicine. April, 2006.

PMID: 16681283

Summary:

  • “Adjust performance goals to account for the socioeconomic status of patients and allow for limited exceptions to the program.”
  • P4P programs must realize that patients have many determinants of health, and that as little as 10% of their health status can be based on their health provision.
  • P4P in New Zealand and the United Kingdom have devised ways to risk adjust.

Significance to Literature:

P4P programs must risk adjust in order to accurately assess physician performance.

 

(260) Pine M, et al. Enhancement of Claims Data to Improve Risk Adjustment of Hospital Mortality. JAMA. 2007: 297(1) 71-76.

PMID: 17200477

Summary:

  • Assesses the use of disease present on admission (POA) codes when determining the risk-adjusted mortality rate.
  • Study concluded that adding POA codes and limited numerical laboratory data on admission resulted in substantially improved risk-adjustment equations.
  • Only modest additional improvements in risk adjustment equations resulted from including “difficult-to-obtain” key clinical findings.

Significance to Literature:

POA codes and numerical laboratory codes on admission may be helpful for risk adjustment in hospital P4P programs.

 

(295) Mehta RH, et al. Association of Patient Case-Mix Adjustment, Hospital Process Performance Rankings, and Eligibility for Financial Incentives. JAMA. 2008: 300(16) 1897-1903.

PMID: 18940976

Summary:

  • Analysis of CMS acute myocardial infarction process performance measure rankings both pre and post risk adjustment for patient demographics.
  • Individual hospital rankings of process performance changed when risk adjusted.
  • 16.5% of institutions actually changed P4P status categories after accounting for patient demographics and comorbidities.

Significance to Literature:

Even process based measures should incorporate risk adjustment.

 

(297) Coleman K, Hamblin R. Can Pay-for-Performance Improve Quality and Reduce Health Disparities? PLoS Medicine Perspectives. 2007: 4(6) e216-e217.

PMID: 17564492

Summary:

  • It is unclear whether quality improvements have been due to reimbursement potential, or simply increased focus causing increased quality.
  • One way to possibly reduce disparities is create QI opportunities for local goal orientation.

Significance to Literature:

Use P4P to reinforce program goals.

 

(307) Blakely T, Fawcett J, Hunt D, Wilson N. What is the contribution of smoking and socioeconomic position to ethnic inequalities in mortality in New Zealand? The Lancet. 2006: 368 44-52.

PMID: 16815379 

Summary:

  • Article addresses socioeconomic position in New Zealand and its role in health inequalities.
  • Specifically analyzes smoking cessation rates in Maori populations and non-Maori populations, and how cessation contributes to overall health benefits.
  • Study concludes that many other factors contribute to disparities as well.

Significance to Literature:

It will be difficult for P4P programs to tease out risk adjustment factors.

 

(339) Johnson, RM et al. Outcomes of a Seven Practice Pilot in a Pay-for-Performance (P4P)-Based Program in Pennsylvania. Journal of Racial and Ethnic Health Disparities. 2015 March 1;2(1):139-148.

PMID: 25893158

Summary:

  • Evaluation of the impact of seven Pennsylvania P4P pilot programs on racial and ethnic minority patient outcomes with regards to six-month interventions for hypertension, diabetes, and pediatric asthma.
  • Patient medical records were reviewed to determine how interventions impacted BMI, diet and exercise, smoking, visit compliance, blood pressure, sodium intake and weight management, medication reconciliation, HbA1c, lipid profile and anti-inflammatory medications.
  • Significant improvements were shown in all seven practices and 13/19 interventions

Significance to Literature:

Support for P4P program effects on racial and ethnic minority patient outcomes, especially in interventions related to education, discussion, and patient medical documentations

 

(346) Rajaram R, Barnard C, Bilimoria KY. Concerns About Using the Patient Safety Indicator-90 Composite in Pay-for-Performance Programs. JAMA.2015;313(9):897-898. doi:10.1001/jama.2015.52.

PMID: 25654581

Summary:

  • In 2003 the Agency for Healthcare Research and Quality (AHRQ) released 20 patient safety indicators (PSI) to measure adverse events
  • CMS uses PSI-90, a composite score of eight weighted PSI measurements, as a core metric in pay-for-performance programs
  • The author identifies five problems with the current PSI-90 measure including (1) flawed component measures, (2) clinical areas targeted, (3) accuracy of adverse events, (4) adequacy of risk adjustment, and (5) formulation of the composite measure.
  • The author provides several ways composite measures such as PSI-90 may be improved

Significance to Literature:

Author identifies problems and solutions to CMS’ use of PSI-90 in pay-for-performance programs

 

(354) Damberg CL, Elliott MN, Ewing BA. Pay-for-performance schemes that use patient and provider categories would reduce payment disparities. Health Affairs. 2015 Jan;34(1):134-42. doi: 10.1377/hlthaff.2014.0386.

PMID: 25561654

Summary:

  • Providers caring for a disproportionately disadvantaged patient population often have lower quality measures and decreased compensation
  • Authors proposed and evaluated an alternative performance-based payment model by “post-adjusting” provider payments based on patient characteristics such as income, race/ethnicity, and region.
  • Clinics were segmented into “disadvantaged, intermediate, and advantaged provider organizations” according to the populations they served.
  • Post-adjustment strategy doubled payments to disadvantaged provider groups and reduced payment disparities

Significance to Literature:

Post-adjusted provider payments could align goals of disparity reduction and quality improvement.

 

(442) Petersen et al. Impact of a Pay-for-Performance Program on Care for Black Patients with Hypertension: Important Answers in the Era of the Affordable Care Act. Health Serv Res. 2016 Jun 22. doi: 10.1111/1475-6773.12517. [Epub ahead of print]

PMID: 27329344

Summary:

  • Data was collected between 2007 and 2009 from Veterans Affairs (VA) physicians to evaluate the effect of P4P on the quality of hypertension care for black patients and risk selection
    • The study was nested within a randomized control trial for assessing the impact of P4P on hypertension care in the VA primary care setting
    • Physician-level incentives, practice-level incentives, and a combination of both were used for the incentive arm of the larger study but were combined in this particular evaluation
    • Participants received feedback and potential monetary rewards every four months for 20 months, with an average compensation of $2,744 over the course of the study
    • Risk selection was determined by the evaluating the proportion of patients who switched providers, patient visit frequency, and primary care panel turnover
  • The proportion of black patients meeting blood pressure goals or receiving an appropriate clinical response to uncontrolled blood pressure (both based on JNC 7 hypertension guidelines) increased by 6.3% from baseline with physicians receiving financial incentives compared to control physicians
  • There was no difference between patient groups in terms of provider switching, visit frequency, or panel turnover

Significance to Literature:

Evidence that P4P can improve blood pressure control for black patients without producing risk selection

 

(465) Roberts, Zaslavsky, Barnett, et al. Assessment of the Effect of Adjustment for Patient Characteristics on Hospital Readmission Rates: Implications for Pay for Performance. JAMA Internal Medicine. 2018

PMID:  30242346

Summary:

  • Observational study of 2013-2014 Medicare claims and US Census data aimed at determining if differences in hospital readmission rates are attributable to patient characteristics not currently used in Medicare’s Hospital Readmission Reduction Program (HRRP)
  • Compared all-cause readmission within 30 days of discharge with and without adjustment for additional clinical and social characteristics, including cumulative chronic disease burden, dual enrollment in Medicaid, educational attainment, and household income
  • Adjusting for these additional variables reduced variation in readmission rates across hospitals and had a significant effect on expected penalties for hospitals primarily serving vulnerable patient populations

Significance to Literature:

Findings demonstrate that, as currently constructed, the Medicare HRRP “penalizes hospitals to some extent for serving poorer and sicker patients,” and that P4P programs can have unintended negative consequences if risk adjustment is inadequate.