An Investigation of the Management Uses of Health-based Risk Adjustment Tools by U.S. Purchasers and Health Plans

Does the adoption of health-based risk adjustment tools have uses beyond direct health plan payment? For example, some purchasers, health plans, and consultants are using these tools to identify candidates for case management, for underwriting, and to set premium contribution levels. Others are using them for their covered population for activities such as profiling provider networks, strategic management, and budgeting. Specifically, the researchers answered the following questions: 1) How can health-based risk adjustment be understood as a financial and medical management tool? 2) Who is using this tool nationally? 3) What are the trends in implementation? 4) What impact does this tool have on management and organizational decision making? 5) What additional dissemination efforts are warranted? This study provided public and private decision makers with a better understanding of how risk adjustment applications (other than payment) have diffused throughout the market and affected access, efficiency, and quality.