Ian Duncan

By Ian Duncan

A growing topic in healthcare in the United States and other countries is the decentralization of risk from the ultimate healthcare payer (insurance companies and government in the United States; national health systems in other countries) to providers of healthcare services. Healthcare providers have traditionally taken clinical risk.1 However, payers are increasingly looking to providers to assume financial risk, in addition to the risk of clinical quality and outcomes of their managed populations. Numerous different types of contracts are being signed between providers and payers: pay for quality; pay for performance; shared risk and shared savings arrangements; bundled payments, accountable care and capitation (full or partial risk). Any contracting entity must decide what is the right form of contract to enter, what contract features to include and what price to offer the payer and what risk the entity is assuming in doing so. The assessment of opportunity, design of the contract terms, pricing, risk management and outcomes evaluation for these contracts are increasingly complex exercises. This chapter covers these issues, including the actuarial mathematics of contract risk assessment and mitigation, taking the reader through the 5 components of a Value-based contract.

Part of the book: Health Insurance

By Ian Duncan and Tamim Ahmed

Patients are often at risk of consuming significant medical resources during the last 6 to 12 months of life, without improving their life expectancy. We develop a model for predicting patients likely to die within the next 6 to 12 months based on administrative claims and demographic data. Standard statistical models as well as newer machine learning approaches are used to identify target patients. Patients identified through the model are candidates for palliative care of hospice care. Timely intervention with appropriate care has been shown to both improve the quality of life of such patients while also reducing resource consumption. We demonstrate the use of the model by incorporating in an economic model of an intervention program, showing that intervention in the highest predicted probability cohort can provide a positive return on investment, provided the program is targeted at the highest-risk patients.

Part of the book: Palliative Care

By Ian Duncan and Tamim Ahmed

Healthcare in Colombia is financed by the government through insurers (“EPSs” or Entidades Promotoras de Salud). Under the current system funds are distributed to EPSs through a risk-adjustment system using age/sex and geographic location. The current system has many short-comings that have required the development of work-arounds to ensure that EPSs are adequately compensated for high-risk members. Many countries use a condition-based risk adjustment system. We develop and test the accuracy of a total of seven different models (including two models that proxy the current Colombian system for comparative purposes). By including high-risk conditions in the risk-adjustment model the proposed system would treat all insurers and members equally and remove the need for special payments. In this chapter we explore the development of such a condition-based risk-adjustment system, discuss some of the issues that it raises and suggest ways that they may be addressed.

Part of the book: Health Insurance Across Worldwide Health Systems