Global Risk-Adjusted Payment Models

Global health care payment systems reflect enormous differences in provider characteristics, health systems, and development levels. Risk adjustment is used for payment and performance measurement to correct for demand heterogeneity and incentives for plans and providers to prefer healthy, low-cost patients, and to provide quality care. This article reviews the practical, theoretical, and statistical aspects of risk adjustment models, which use socio-demographic variables and more recently morbidity and pharmaceuticals, to predict outcomes. Diverse uses of risk adjustment include geographical budget allocations, health plan premium equalization, pay for performance, primary care provider payment, integrated provider networks, and rewards for good doctor performance. Settings in more than 30 countries are examined, which include high-, middle- and low-income countries, competitive health plans and single payer systems, integrated provider networks, clinics, and solo practice primary care doctors. Recent concepts in health economics are highlighted that hold potential for improving efficiency and equitable patient access to health care. (153 words) 1