Reconciling quality measurement with financial risk adjustment in health plans

Initiatives to improve quality measurement (QM) and to create systems for financial risk adjustment (RA) have developed in response to concerns about price competition's threat to quality and stimulation of risk selection. QM is designed to help purchasers identify best plans, to aid plans in their selection of providers, to facilitate quality improvement by plans and providers, and to assist patients faced with choices among plans and providers. The goal of RA is to eliminate incentives for plans and providers to avoid sick, high-cost patients in favor of healthy, low-cost patients.

For QM it is often necessary to identify all patients with a particular condition, and many quality measures involve intervening on patients early in the course of their disease. Identifying patients through utilization decisions (for example, identifying patients with depression through receipt of an antidepressant prescription) may bias QM. For RA, the focus is on the highest-cost patients, and patient capture through resource utilization is more likely to be appropriate.

Achieving QM and RA depends on improving information systems and patient identification processes and developing standard definitions for important variables. QM and RA could both be improved, and the conflicts between them reduced, if they were based more on detailed clinical data, if consensus definitions of quality of care for specific diagnoses could be achieved, if the number of QM measures that target acute and chronic care (versus preventive care) were increased, and if information systems were enhanced.