Improving the Risk Adjustment Method for Quality Care Measures through Application of an Innovative Individual-Level Socioeconomic Measure

PROJECT SUMMARY While patients’ socioeconomic status (SES) as a key element of social determinants of health (SDH) significantly impacts clinical care quality and outcomes, it is often beyond the control of health care organizations (HCOs), and HCOs and clinicians have been held accountable for care quality and outcomes. Thus, when SES of patients is not accounted for, there are unintended negative consequences that can be detrimental to the HCOs, especially those serving disadvantaged populations, due to their implications on accountability applications (eg, payment) under the federal and state pay-for-performance programs. In response to these concerns, the 2017 reports from the National Quality Forum (NQF) and the National Academy of Medicine (NAM) recommend adjusting performance of HCOs for patients’ SES. Importantly, while both NAM and NQF suggested that data on social risk factors should be as granular as possible to ensure accuracy, they highlighted the lack of a suitable measure for individual-level SES as the key challenge for accurate risk-adjustment of HCOs’ performance. Some individual-level SES measures such as Medicaid eligibility are available, but they are still unsuitable for accurate risk adjustment due to significant within-group heterogeneity and lack of granularity for one’s SES. Also, aggregate-level SES measures are routinely used but have failed to capture some quality care measures’ associations with SES. While the Minnesota State legislature mandated the state to develop and report a suitable risk adjustment model addressing health disparities, the 2017 Minnesota Department of Health’s Quality Reporting System Risk Adjustment Assessment Report also recognizes the lack of individual-level SES measures as an important barrier to effective and fair risk adjustment and the limitations of available aggregate-level SES measures. The HOUSES (HOUsing-based SES) index, a validated individual-level SES index, overcomes this dearth of individual-level SES measures while addressing the limitations of conventional SES measures. Addressing the challenges to improving the risk adjustment method, we propose 1) to implement HOUSES that is currently only available in Southeast MN counties throughout the entire state of Minnesota (Aim 1); 2) to determine which performance metrics available in the 2017 Minnesota Community Measurement (MNCM) report are sensitive to SES as measured by HOUSES (Aim 2a); and 3) develop an improved risk adjustment model incorporating the HOUSES of patients on the performance metrics of HCOs (Aim 2b). The proposed study will be an indispensable step in expanding HOUSES across the US for the purpose of addressing the lack of suitable individual-level SES measures as a key challenge at a national level for proper risk adjustment and easing the unmet needs of stakeholders (eg, patients, clinicians, HCOs, payers, and government). It will help the stakeholders to achieve 1) more valid and equitable risk adjustment and pay for performance, 2) high-value care for HCOs, and 3) community partnership.