Adding Social Factors to Risk Adjustment Not Enough to Reach Health Equity, Paper Says

Population-based payment models can help promote health equity, but only if risk adjustment supports increased resource allocation to historically marginalized groups. A study published in Health Affairs suggests that payment adjustments factoring in more than predictive accuracy alone are needed to reduce disparities in population-based payment models.

Unlike fee-for-service (FFS) systems, which distribute spending based on service use, population-based payment systems such as the Medicare Shared Savings Program or Medicare Advantage program distribute spending based on population characteristics. In these models, payment allocation is determined by risk adjustment, which has historically been strictly...