Widespread assessment of risk-adjusted outcomes: lessons from local initiatives

Controlling costs while maintaining quality is a crucial element of national health care reform. Prompted generally by concerns of local businesses, states and regions around the country have already initiated such dual efforts. The central component of these activities is the examination of risk-adjusted outcomes.

Publicizing comparisons across providers and using these data for payer contracting have prompted several concerns among many providers, primarily involving reservations about the validity of the risk-adjustment methodologies and the fairness of the outcomes data reports. In contrast, business leaders recognize potential limitations in the data but argue that some information is better than none. They believe that these efforts have already saved money by forcing providers to compete and to justify unusually high costs. Troubling questions arise about whether publicizing their outcomes may prompt providers to avoid especially sick and high-risk patients. Although common themes emerge, each of these initiatives to monitor risk-adjusted outcomes has had to address specific local concerns. The form that these local initiatives take is influenced particularly by relationships between the business and provider communities and their respective visions of how to motivate change in the health care sector.

In some regions, businesses and providers have worked collaboratively, whereas in others relationships have been strained. One major problem in making objective decisions about risk-adjusted outcomes methods is the lack of clear evidence about whether such information truly measures quality of care. Whether a standard national quality monitoring program will satisfy local demands remains unclear.