Risk assessment of military populations to predict health care cost and utilization

Abstract

The Military Health System is examining new approaches to financing the care of covered beneficiaries. Since population health care costs depend on illness burden (case-mix), efficient financing should recognize variations in the illness burden of populations seen by different providers. Several mature risk adjustment systems that extract illness burden profiles from computerized encounter records are now used by Medicare, Medicaid, the Veteran’s Health Administration, commercial insurers in the United States, and international stakeholders to understand and manage health care delivery systems. These systems are designed for “population-based” management; “units” are person-years of medical care, and the key outcome is the cost, for each person, of a year of care. The expected cost for a provider for a year is the sum of individual-level person-year estimates for the population served.