Improving Helth Care by Linking Risk Adjustment and Condition-Specific Quality Measurement

When paid a fixed amount per capita, even if adjusted by demographic risk factors, health plans have financial incentives to avoid providing expensive services, especially those needed on a chronic basis. Since routine measurement of quality of care is limited primarily to preventive service utilization, the potential for patients with serious chronic disease to receive poor quality care is significant. We argue that both adjustment of payments to health plans based on the illness burden among their enrollees and measurement of quality of care will be necessary to ensure health plans provide high quality care. for some costly chronic diseases, condition-specific risk adjustment and quality measurement using data already collected for clinical management purposes may be necessary. We provide two examples (HIV and CF) and discuss the implications for information systems.