Social Risk Adjustment Important for Alternative Payment Model Success, Health Outcomes

In order to better understand why inadequate risk adjustment could counterproductively reduce payments to groups, First Report Managed Care spoke with Christina A Nguyen, AB, and co-author Mary Beth Landrum, PhD, both from Harvard Medical School. 

According to the findings of a recent study, social risk adjustment may help mitigate adverse consequences of performance-based payments for physician groups who serve socially vulnerable populations. The study, published in JAMA Network Open, examined “the association of social risk with change in physician group performance on diabetes and cardiovascular disease (CVD) quality measures in a commercially insured population.” 

The research team, led by Christina A Nguyen, AB, Harvard Medical School, and colleagues, identified 1,684,167 enrollees between 18 to 65 years of age with diabetes or CVD. According to the researchers, performance rates were high for HbA1C and LDL-C level testing, however, were lower for statin use and disease control measures.

“Although overall agreement between performance scores with base vs full adjustment was high, there was still substantial reordering for some measures.” Ms Nguyen and colleagues wrote. “For example, social risk adjustment resulted in reordering for disease control in the diabetes cohort.

In conclusion, the researchers explained that both clinical and social risk adjustment affected rankings on hospitals admissions.

Please tell us a little about yourselves and your research interests.

Christina A Nguyen: I am a Senior Research Analyst in the Department of Health Care Policy at Harvard Medical School and incoming PhD student in the TIES program at the MIT Sloan School of Management. My research interests are in health care quality and delivery systems, innovation, and technology.

Mary Beth Landrum: I am a Professor of Health Care Policy with a specialty in biostatistics in the Department of Health Care Policy at Harvard Medical School. My primary research focus is on the development and application of statistical methodology for health services research.

In general, how do social risks among patients impact care quality among physicians? 

Patients with social risks may be more difficult and costly to care for. As a result, providers with a disproportionate number of socially disadvantaged patients may demonstrate lower performance on quality measures and/or forgo certain services to reduce costs. 

Can you briefly highlight the controversy surrounding use of social risk adjustment in payment models?

Some argue that having a disproportionate number of high-risk patients who tend to be sicker and more costly can skew a provider’s quality performance towards the left. However, others assert that socially disadvantaged patients often receive care in lower-quality organizations, and that social risk adjustment would obscure true performance or excuse providers that deliver a lower standard of care to disadvantaged patients.

Based on your findings, why is it important to take social risk into consideration?

It is important to take social risk into consideration because adjustment can result in changes in performance rankings for a subset of provider groups and a substantial reduction in variation in performance on some measures that did not result in reordering. Thus, payment models relying on these measures with limited adjustments would penalize groups serving disadvantaged patients. The implications of social risk adjustment are different under various pay-for-performance programs where the focus may be on either or both variance and reordering. We found evidence of sizable ranking changes among a meaningful subset of providers as well as variance reduction in disease control measures, which would have an impact on bonuses and penalties in a model where scores are based on either rankings or deviation from an average. 

What are the major takeaways from your study that clinicians and payers can put into practice?

As alternative payment models increasingly rely on standard quality measures of physician and physician group performance to define and reward high-quality care, our findings suggest that inadequate risk adjustment could counterproductively reduce payments to groups whose patient populations would benefit most from additional resources, including social interventions. Physician group rankings on disease control measures are among those most altered by social risk adjustment, particularly for diabetes. This is important because disease control measures have become increasingly utilized in quality measurement systems as proxies for less common outcomes, but they are less controllable than process measures, which are easier to achieve. Use of these measures to determine group payment without adjustment for social risk factors could lead to fewer resources for physicians caring for populations with greater clinical and social risk and exacerbate disparities in care.

What knowledge gaps still exist regarding social risk and physician group performance?

Future research could examine the impact of using individual-level risk factor adjustments and the impact of adjustment on clinical outcomes in addition to the use-based outcomes in our study. Using individual-level risk factor adjustments and analyzing more diverse populations could show larger impacts.