Credit risk

Already have a credit risk score – how about adding a health risk score?

ARLINGTON, Va. — All patients should have a “health risk score” that tracks them over time, Peter Orszag, CEO of financial consulting at Lazard, New York, said at Health Datapalooza’s meeting. Academy Health here.

“We all have a credit risk score which is assessed by these three different [credit] agencies,” Orszag said in a remote presentation on Tuesday. Similarly, “we should all have an individual health risk score that follows us over time.”

A health risk score would give insurers a reason to invest more in patient health, he said. Patients often change insurers after a few years, so insurance companies have no reason to invest in improving patient health; their company is unlikely to see reduced insurance claims because the improvement will only pay off when the patient is with another insurer.

“What’s the point of paying for something that someone else is going to benefit from?” said Orszag, who served as director of the Office of Management and Budget (OMB) in the Obama administration.

Instead, “if we had something like this kind of individualized health risk score, then there may be a payment from one payer to another depending on what happened to my risk score while I was covered by health insurance company 1 instead of [Company] 2 – getting them to invest in the things that will improve my health score and eliminating this kind of time consistency issue which is at least a partial cause of why we’re not making a lot of the investments we should be making” , he said.

Another benefit of a health risk score is that it would solve some of the problems with today’s risk adjusters, Orszag said. Risk adjusters are the calculations used by insurers to account for the degree of illness in a patient population, for the purpose of paying providers.

Current risk adjusters don’t work very well, according to Orszag. “As an example, the risk adjustment that underpins Medicare Advantage — and much of the risk adjustment throughout the health care system — is based on taking health care claims at point in time and on a cross-sectional analysis. If you ask, ‘How much variation in spending can these risk adjusters explain?’, the short answer is: not much… Depending on which metric you use, 80% to 90% of healthcare expenditure is not explained by these risk adjusters.”

And of that 80% to 90% that is unexplained, there’s probably some that could be attributed to patients’ underlying characteristics that aren’t taken into account at all, he continued. “In other words, risk adjusters are just very bad at the job they’ve been given, in part because they’re exclusively claims-based in a cross-cutting way that doesn’t follow people in the weather.”

That’s why the risk score would be “fundamentally different from the risk adjusters that are used today because it’s associated with me and it follows me over time,” Orszag said. Plus, “it’s based on a broader range of data than just my health insurance claims” and “can be linked to my medical records and a whole variety of other data sources, and give a much better indication of my health”.

Orszag also discussed the lessons the COVID-19 pandemic can teach about healthcare spending, especially since many people have seen doctors and hospitals far less during the pandemic. “There was a whole bunch of care that was just missing in 2020 that we haven’t really fully caught up on,” he said. “And so the question becomes, what does this tell us?”

His response: This should at least make people want to consider whether the “missing” care was really necessary. “If we do a very simple analysis and look across the country at the states where there was the biggest reduction in outpatient visits and the type of discretionary care had the biggest declines in 2020, and the death rate in 2021 , what you’re seeing is actually a negative relationship – i.e. it looks like all that extra health care use that just went missing…wasn’t associated with higher mortality.”

On the contrary, the reverse seems to be true: “The states where there has been the greatest decline in this type of discretionary care are the states where the excess mortality rate of non-COVID cases has increased the least,” he said. he declares. “This should at least raise questions about whether there is much we can do to achieve a better cost-quality trade-off in health care.”

  • Joyce Frieden oversees MedPage Today’s coverage in Washington, including stories about Congress, the White House, the Supreme Court, professional health associations and federal agencies. She has 35 years of experience in health policy. To follow