Formal risk adjustment by private employers

Published: September 1, 2001
Category: Bibliography > Papers
Authors: Ellis RP
Countries: United States
Language: null
Types: Finance/Budgeting
Settings: Health Plan

Inquiry 38:299-309.

Department of Economics, Boston University, Boston, MA, USA

This paper explores explanations for why few private employers have adopted formal risk adjustment. The lack of data, challenges of using highly imperfect signals, and absence of market power are not compelling explanations. Alternative strategies that reduce selection problems are clearly important. The central argument is that U.S. health markets are not in equilibrium, but rather are changing rapidly. Since many agents-consumers, employers, health plans, and providers–do not currently demand formal risk adjustment, it is not surprising that adoption has been slow. Recent changes in health plan markets may change the demand and accelerate future adoption.

Comment in Inquiry. 2001 Fall;38(3):310-4.

PMID: 11761357

Predictive Risk Modeling,Financial Analysis,Payment,United States,Actuarial Analysis,Data Collection,Diagnosis-Related Groups/economics,Diffusion of Innovation,Fees and Charged,Insurance Selection Bias,Social Change

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