Paper #1139

Title:

Hybrid risk adjustment for pharmaceutical benefits

Authors:

Manuel García-Goñi, Pere Ibern and José María Inoriza

Date:

January 2009

Abstract:

This paper analyses the application of hybrid risk adjustment versus either prospective or concurrent risk adjustment formulae in the context of funding pharmaceutical benefits for the population of an integrated healthcare delivery organization in Catalonia during years 2002 and 2003. We apply a mixed formula and find that a hybrid risk adjustment model increases incentives for efficiency in the provision of low risk individuals at health organizations not only as a whole but also at each internal department compared to only prospective models by reducing within-group variation of drug expenditures.

Keywords:

Drug expenditure, hybrid risk-adjustment, morbidity, clinical risk groups

JEL codes:

I18

Area of Research:

Labour, Public, Development and Health Economics

CRES Series number:

63

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