Risk adjustment and predictive modelling use relationships in administrative health information from the past to determine the expected future health care needed by each individual in a population. Without risk adjustment it can be difficult or impossible to make meaningful comparisons of health services. This project aims to demonstrate how the analysis of routine data can be used to improve the access, equity and efficiency of health services.
Professor Ian Duncan, University of California, on the applications of risk adjustment in health care and some of the pitfalls and controversies associated with the techniques.
Risk adjustment has been used for many decades in research studies but since the 1980s the approach has increasingly been used in managing health care systems. Risk adjustment tools are used widely in the United States and in parts of continental Europe to help determine health payments – either for fixing ‘capitated’ budgets or for deciding reimbursement rates for individual patients. Several proprietary risk adjustment systems from the US are now seeking to expand into European markets.
To date, the most widespread use of risk adjustment in the NHS has been in the use of ‘case finding’ predictive modelling tools, such as PARR and the Combined Model. In August 2011 the Department of Health announced that it will not be commissioning a national upgrade of these two models, but the Nuffield Trust is currently exploring a range of models that might be needed in future by the NHS in England. Scotland and Wales have their own predictive models called SPARRA and PRISM respectively.
Guidance on predictive risk modelling for commissioners
To help commissioners, the Nuffield Trust is exploring a range of models that might be needed in future by the NHS in England.
In November 2011 we published guidance that explores how clinical commissioners should choose a predictive risk model based on factors including the outcome to be predicted, the cost of the model and its associated software, the availability of data, the accuracy of the predictions, and the preventive intervention to be offered on the basis of predictions. This follows an article by Dr Geraint Lewis, Natasha Curry, and Dr Martin Bardsley for the Health Service Journal in October 2011.
We are aiming to demonstrate how the analysis of routine data can be used to improve the access, equity and efficiency of health services.
Our research summary: Predictive risk and health care: an overview (March 2011) provides a useful overview of how risk adjustment techniques are currently being used in the NHS, considering the principal applications of risk adjustment, namely:
Case finding: identifying individual patients at risk of a particular outcome such as unplanned hospital admission in the next 12 months. We have recently been using the principles of risk adjustment to develop a case finding tool for social care.
Resource allocation: changes to the way health services are organised and delivered in the NHS in England are coming at an important time in the development of risk adjustment techniques. Work on a person-based resource allocation formula for the NHS in England has been used to set GP practice budgets and could play an important part in setting GP consortium budgets.
Performance management: using risk adjustments when making comparisons between areas or organisations. This could apply to comparative analyses of Ambulatory Care Sensitive Conditions.
This work is all made feasible thanks to the availability of large datasets and improved computing power. It is now possible to link GP, hospital and social care information whilst protecting the confidentiality of patients.
The increasing ability to link large data sets at individual level pseudonymously means that the range of data used on these types of models and their applications look set to grow. For example, work at the Nuffield Trust has recently demonstrated that it is possible to build models based on linked GP, hospital and social care information that predict which individuals in a population are at risk of starting intensive social care in the next 12 months.
As well as publishing new materials, such as our research summary and our guide for commissioners, we also held a one-day conference in June 2011. Details of this conference, including an event report and video interviews with keynote speakers, are available now from our dedicated events page.