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Hybrid risk adjustment for pharmaceutical benefits

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  • Manuel García-Goñi
  • Pere Ibern
  • José María Inoriza
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    Abstract

    This paper analyses the application of hybrid risk adjustment versus either prospective or concurrent risk adjustment formulae in the context of funding pharmaceutical benefits for the population of an integrated healthcare delivery organization in Catalonia during years 2002 and 2003. We apply a mixed formula and find that a hybrid risk adjustment model increases incentives for efficiency in the provision of low risk individuals at health organizations not only as a whole but also at each internal department compared to only prospective models by reducing within-group variation of drug expenditures.

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    Bibliographic Info

    Paper provided by Department of Economics and Business, Universitat Pompeu Fabra in its series Economics Working Papers with number 1139.

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    Date of creation: Jan 2009
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    Handle: RePEc:upf:upfgen:1139

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    Web page: http://www.econ.upf.edu/

    Related research

    Keywords: Drug expenditure; hybrid risk-adjustment; morbidity; clinical risk groups;

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    1. van Barneveld, Erik M. & Lamers, Leida M. & van Vliet, Rene C. J. A. & van de Ven, Wynand P. M. M., 2001. "Risk sharing as a supplement to imperfect capitation: a tradeoff between selection and efficiency," Journal of Health Economics, Elsevier, Elsevier, vol. 20(2), pages 147-168, March.
    2. Buchner, Florian & Wasem, Jurgen, 2003. "Needs for further improvement: risk adjustment in the German health insurance system," Health Policy, Elsevier, Elsevier, vol. 65(1), pages 21-35, July.
    3. David M. Cutler & Mary Beth Landrum & Kate A. Stewart, 2006. "Intensive Medical Care and Cardiovascular Disease Disability Reductions," NBER Working Papers 12184, National Bureau of Economic Research, Inc.
    4. Schokkaert, Erik & Van de Voorde, Carine, 2003. "Belgium: risk adjustment and financial responsibility in a centralised system," Health Policy, Elsevier, Elsevier, vol. 65(1), pages 5-19, July.
    5. Joseph P. Newhouse, 1996. "Reimbursing Health Plans and Health Providers: Efficiency in Production versus Selection," Journal of Economic Literature, American Economic Association, vol. 34(3), pages 1236-1263, September.
    6. Corinne Behrend & Florian Buchner & Michael Happich & Rolf Holle & Peter Reitmeir & Jürgen Wasem, 2007. "Risk-adjusted capitation payments: how well do principal inpatient diagnosis-based models work in the German situation? Results from a large data set," The European Journal of Health Economics, Springer, Springer, vol. 8(1), pages 31-39, March.
    7. Ellis, Randall P. & McGuire, Thomas G., 1988. "Insurance principles and the design of prospective payment systems," Journal of Health Economics, Elsevier, Elsevier, vol. 7(3), pages 215-237, September.
    8. Van de ven, Wynand P.M.M. & Ellis, Randall P., 2000. "Risk adjustment in competitive health plan markets," Handbook of Health Economics, Elsevier, in: A. J. Culyer & J. P. Newhouse (ed.), Handbook of Health Economics, edition 1, volume 1, chapter 14, pages 755-845 Elsevier.
    9. Manuel Garc�a-Go�i & Pere Ibern, 2008. "Predictability of drug expenditures: an application using morbidity data," Health Economics, John Wiley & Sons, Ltd., vol. 17(1), pages 119-126.
    10. Nigel Rice & Paul Dixon & David Lloyd & David Roberts, 1999. "Derivation of a needs based capitation formula for allocation prescribing budgets," Working Papers, Centre for Health Economics, University of York 034cheop, Centre for Health Economics, University of York.
    11. Keeler, Emmett B. & Carter, Grace M. & Trude, Sally, 1988. "Insurance aspects of DRG outlier payments," Journal of Health Economics, Elsevier, Elsevier, vol. 7(3), pages 193-214, September.
    12. Kathryn Antioch & Randall Ellis & Steve Gillett & Daniel Borovnicar & Ric Marshall, 2007. "Risk adjustment policy options for casemix funding: international lessons in financing reform," The European Journal of Health Economics, Springer, Springer, vol. 8(3), pages 195-212, September.
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    Cited by:
    1. M. Carreras & M. García-Goñi & P. Ibern & J. Coderch & L. Vall-Llosera & J. Inoriza, 2011. "Estimates of patient costs related with population morbidity: can indirect costs affect the results?," The European Journal of Health Economics, Springer, Springer, vol. 12(4), pages 289-295, August.
    2. Vivas-Consuelo, David & Usó-Talamantes, Ruth & Trillo-Mata, José Luis & Caballer-Tarazona, Maria & Barrachina-Martínez, Isabel & Buigues-Pastor, Laia, 2014. "Predictability of pharmaceutical spending in primary health services using Clinical Risk Groups," Health Policy, Elsevier, Elsevier, vol. 116(2), pages 188-195.
    3. Vivas, David & Guadalajara, Natividad & Barrachina, Isabel & Trillo, José-Luis & Usó, Ruth & de-la-Poza, Elena, 2011. "Explaining primary healthcare pharmacy expenditure using classification of medications for chronic conditions," Health Policy, Elsevier, Elsevier, vol. 103(1), pages 9-15.

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