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Activity Number:
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393
- From Health Disparity to Health Fairness: Stories Told, Lessons Learned, and Science Forward
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Type:
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Invited
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Date/Time:
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Thursday, August 12, 2021 : 2:00 PM to 3:50 PM
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Sponsor:
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Academy for Health Services Research and Health Policy
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Abstract #316699
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Title:
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New Advances for Fairness in Plan Payment Risk Adjustment
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Author(s):
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Anna Zink* and Sherri Rose
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Companies:
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Harvard University and Stanford University
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Keywords:
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fairness;
risk adjustment
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Abstract:
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Risk adjustment formulas predict spending in health insurance markets. These predictions are instrumental in determining payments for health insurers and ensuring that incentives in insurance markets are fair for individuals regardless of their health status. In this work, we evaluate risk adjustment formulas used in US insurance markets using a fairness framework. We consider risk adjustment formulas unfair if they incentivize differential treatment for groups as a result of undercompensation for groups. I will discuss known issues of fit in the risk adjustment formula today and present a new method for detecting groups undercompensated by the risk adjustment formula. Finally, I review methods for improving fairness in health plan payments with a focus on methods that change the objective function of the risk adjustment formula. Our work shows that small modifications to the objective function can lead to large improvements in risk adjustment performance for undercompensated groups.
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Authors who are presenting talks have a * after their name.
