IDEAS home Printed from https://ideas.repec.org/a/eee/socmed/v361y2024ics0277953624008001.html
   My bibliography  Save this article

Adjusting the risk-adjustment: Accounting for variation between organisations in the responsiveness of their expenditure to need

Author

Listed:
  • Urwin, Sean
  • Anselmi, Laura
  • Mentzakis, Emmanouil
  • Lau, Yiu-Shing
  • Sutton, Matt

Abstract

There is concern that basing healthcare budgets on risk adjustment estimates derived from historical utilisation data may reinforce patterns of unmet need. We propose a method to avoid this, based on a measure of how closely local health organisations align resources to the needs of their populations. We refer to this measure as the ‘responsiveness of expenditure to need’ and estimate it using national person-level data on use of acute hospital and secondary mental health services in England. We find large variation in responsiveness in both services and show that higher expenditure responsiveness in mental health is associated with fewer suicides. We then re-estimate the national risk-adjustment model removing the data from the organisations with the lowest expenditure responsiveness to need. As expected, higher need individuals are estimated to have higher expenditure needs when less responsive organisations are removed from the estimation of the risk-adjustment. Removal of organisations with below-average responsiveness results in the neediest deciles of individuals having an extra £163 (7%) annual need for acute hospital care and an additional £79 (27%) annual need for mental health services. The application of this approach to risk adjustment would result in more resources being directed towards organisations serving higher-need populations.

Suggested Citation

  • Urwin, Sean & Anselmi, Laura & Mentzakis, Emmanouil & Lau, Yiu-Shing & Sutton, Matt, 2024. "Adjusting the risk-adjustment: Accounting for variation between organisations in the responsiveness of their expenditure to need," Social Science & Medicine, Elsevier, vol. 361(C).
    • Handle: RePEc:eee:socmed:v:361:y:2024:i:c:s0277953624008001
    DOI: 10.1016/j.socscimed.2024.117346
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0277953624008001
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.socscimed.2024.117346?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Fleurbaey, Marc & Schokkaert, Erik, 2009. "Unfair inequalities in health and health care," Journal of Health Economics, Elsevier, vol. 28(1), pages 73-90, January.
    2. Smith, Samantha & Connolly, Sheelah, 2020. "Re-thinking unmet need for health care: introducing a dynamic perspective," Health Economics, Policy and Law, Cambridge University Press, vol. 15(4), pages 440-457, October.
    3. Cookson, R. & Asaria, M. & Ali, S. & Shaw, R. & Doran, T. & Goldblatt, P., 2018. "Health equity monitoring for healthcare quality assurance," Social Science & Medicine, Elsevier, vol. 198(C), pages 148-156.
    4. Vallejo-Torres, Laura & Morris, Stephen & Carr-Hill, Roy & Dixon, Paul & Law, Malcom & Rice, Nigel & Sutton, Matthew, 2009. "Can regional resource shares be based only on prevalence data? An empirical investigation of the proportionality assumption," Social Science & Medicine, Elsevier, vol. 69(11), pages 1634-1642, December.
    5. Hugh Gravelle & Matthew Sutton & Stephen Morris & Frank Windmeijer & Alastair Leyland & Chris Dibben & Mike Muirhead, 2003. "Modelling supply and demand influences on the use of health care: implications for deriving a needs‐based capitation formula," Health Economics, John Wiley & Sons, Ltd., vol. 12(12), pages 985-1004, December.
    6. Anna Zink & Sherri Rose, 2020. "Fair regression for health care spending," Biometrics, The International Biometric Society, vol. 76(3), pages 973-982, September.
    7. Sherri Rose & Julie Shi & Thomas G. McGuire & Sharon-Lise T. Normand, 2017. "Matching and Imputation Methods for Risk Adjustment in the Health Insurance Marketplaces," Statistics in Biosciences, Springer;International Chinese Statistical Association, vol. 9(2), pages 525-542, December.
    8. Matthew Sutton & Peter Lock, 2000. "Regional differences in health care delivery: implications for a national resource allocation formula," Health Economics, John Wiley & Sons, Ltd., vol. 9(6), pages 547-559, September.
    9. Laura Anselmi & Yiu-Shing Lau & Matt Sutton & Anna Everton & Rob Shaw & Stephen Lorrimer, 2022. "Use of past care markers in risk-adjustment: accounting for systematic differences across providers," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 23(1), pages 133-151, February.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Anselmi, Laura & Lagarde, Mylène & Hanson, Kara, 2015. "Going beyond horizontal equity: An analysis of health expenditure allocation across geographic areas in Mozambique," Social Science & Medicine, Elsevier, vol. 130(C), pages 216-224.
    2. Hugh Gravelle & Stephen Morris & Matt Sutton, 2012. "Economic Studies of Equity in the Consumption of Health Care," Chapters, in: Andrew M. Jones (ed.), The Elgar Companion to Health Economics, Second Edition, chapter 18, Edward Elgar Publishing.
    3. Van de Poel, Ellen & Van Doorslaer, Eddy & O’Donnell, Owen, 2012. "Measurement of inequity in health care with heterogeneous response of use to need," Journal of Health Economics, Elsevier, vol. 31(4), pages 676-689.
    4. Schokkaert, Erik & Van de Voorde, Carine, 2009. "Direct versus indirect standardization in risk adjustment," Journal of Health Economics, Elsevier, vol. 28(2), pages 361-374, March.
    5. Mohammad Habibullah Pulok & Kees Gool & Mohammad Hajizadeh & Sara Allin & Jane Hall, 2020. "Measuring horizontal inequity in healthcare utilisation: a review of methodological developments and debates," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 21(2), pages 171-180, March.
    6. Eric French & Elaine Kelly & Richard Cookson & Carol Propper & Miqdad Asaria & Rosalind Raine, 2016. "Socio‐Economic Inequalities in Health Care in England," Fiscal Studies, Institute for Fiscal Studies, vol. 37, pages 371-403, September.
    7. Connolly, Sheelah & Brick, Aoife & O'Neill, Ciarán & O'Callaghan, Michael, 2022. "An analysis of the primary care systems of Ireland and Northern Ireland," Research Series, Economic and Social Research Institute (ESRI), number RS137.
    8. Hougaard, Jens Leth & Moreno-Ternero, Juan D. & Østerdal, Lars Peter, 2013. "A new axiomatic approach to the evaluation of population health," Journal of Health Economics, Elsevier, vol. 32(3), pages 515-523.
    9. Joan Costa-Font & Frank Cowell & Joan Costa-i-Font, 2024. "Specific Egalitarianism? Inequality Aversion across Domains," CESifo Working Paper Series 11261, CESifo.
    10. Fabio Pammolli & Francesco Porcelli & Francesco Vidoli & Monica Auteri & Guido Borà, 2017. "La spesa sanitaria delle Regioni in Italia - Saniregio2017," Working Papers CERM 01-2017, Competitività, Regole, Mercati (CERM).
    11. Darius Erlangga & Shehzad Ali & Karen Bloor, 2019. "The impact of public health insurance on healthcare utilisation in Indonesia: evidence from panel data," International Journal of Public Health, Springer;Swiss School of Public Health (SSPH+), vol. 64(4), pages 603-613, May.
    12. Masayoshi Hayashi, 2011. "The effects of medical factors on transfer deficits in Public Assistance in Japan: a quantile regression analysis," International Journal of Health Economics and Management, Springer, vol. 11(4), pages 287-307, December.
    13. Aitor Calo-Blanco, 2015. "Health, responsibility and taxation with a fresh start," Working Papers 15.06, Universidad Pablo de Olavide, Department of Economics.
    14. Pulok, Mohammad Habibullah & van Gool, Kees & Hall, Jane, 2020. "Horizontal inequity in the utilisation of healthcare services in Australia," Health Policy, Elsevier, vol. 124(11), pages 1263-1271.
    15. Vincenzo Carrieri & Apostolos Davillas & Andrew M. Jones, 2023. "Equality of opportunity and the expansion of higher education in the UK," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 69(4), pages 861-885, December.
    16. Ana Suárez Álvarez & Ana Jesús López Menéndez, 2018. "Assessing Changes Over Time in Inequality of Opportunity: The Case of Spain," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 139(3), pages 989-1014, October.
    17. Figueirêdo, Erik Alencar de & Nogueira, Lauro César Bezerra & Santana, Fernanda Leite, 2014. "Igualdade de Oportunidades: Analisando o papel das circunstâncias no desempenho do ENEM," Revista Brasileira de Economia - RBE, EPGE Brazilian School of Economics and Finance - FGV EPGE (Brazil), vol. 68(3), September.
    18. Danny Wende, 2019. "Spatial risk adjustment between health insurances: using GWR in risk adjustment models to conserve incentives for service optimisation and reduce MAUP," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 20(7), pages 1079-1091, September.
    19. Marc Fleurbaey & Vito Peragine, 2013. "Ex Ante Versus Ex Post Equality of Opportunity," Economica, London School of Economics and Political Science, vol. 80(317), pages 118-130, January.
    20. Yonghua Li & Qinchuan Ran & Song Yao & Likun Ding, 2023. "Evaluation and Optimization of the Layout of Community Public Service Facilities for the Elderly: A Case Study of Hangzhou," Land, MDPI, vol. 12(3), pages 1-29, March.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:socmed:v:361:y:2024:i:c:s0277953624008001. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/wps/find/journaldescription.cws_home/315/description#description .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.