Insurance-based Health Metrics Make Some Populations Appear Sicker

Diagnostic intensity varies by geographic region across the United States.

Individuals who move to areas in the United States where medical providers have a greater diagnostic intensity results in increased risk scores for patients, according to a study published in the New England Journal of Medicine.

Diagnostic intensity was defined by investigators as the tendency of providers to offer tests and treatments for patients. Patients in areas with greater diagnostic intensity will have more health issues diagnosed and recorded in their files.

Because population health is typically measured according to medical claims data based on the diseases patients are diagnosed with and treated for, insurance-based health metrics in these areas will make the patients appear sicker than equivalently healthy patients in areas with lower diagnostic intensity.

This is an issue, in part, because standard insurance-based health metrics are used to adjust payments for insurers or providers to account for the apparent health differences in the patients they serve. The study authors suggest that these standard metrics may need to be revised.

“The idea of risk-adjusted payments is to create a level playing field so providers are not penalized for serving sicker or harder-to-treat patients, and insurers are not penalized for covering them,” said co-author Amy Finkelstein. “But if risk adjustment is based on measures that reflect not only underlying patient health but also [a] provider’s diagnostic intensity, that can be problematic.”

The study accounts for all 306 hospital referral regions (HRRs) in the United States, and builds upon the investigators’ previous findings that quantified how much variation in Medicare spending was due to regional medical practices, rather than the underlying health of patients.

The results of the prior analysis showed that nationwide, approximately half of the regional differences in Medicare spending was due to medical practices, while approximately half was due to differences in population health.

In the current study, the investigators examined what happens when Medicare patients move across regions, with a primary focus on how these moves affects an individual’s measure health. The investigators examined the risk scores used to reimburse private insurers in the Medicare Advantage program.

The risk score was designed to capture differences in patient health that affect Medicare spending, according to the study. Those with a risk score of 1 would be expected to have an average level of Medicare spending, and a score of 1.1 would suggest that the person’s spending would most likely be approximately 10% above average.

The results of the study showed that individuals who moved to areas of the United States where providers have a greater diagnostic intensity saw an increase in the risk scores of patients.

The issues regarding geographic variation in diagnostic intensity has been recognized by other investigators; however, the current study is the first to create a solution that could be applied to the issue in practice.

“This work develops a new measure [that] provides practitioners and researchers with place-specific measures of diagnostic intensity that can be used to correct that sort of bias in these measures,” said author Peter Hull.

Some notable trends from the study revealed that medical providers in the Northeast, Deep South, and most of California were more likely to diagnose patients relatively aggressively. Whereas, providers in the Midwest, Mountain west, and other areas, were less aggressive in diagnosing patients.

More specifically, medical providers in Miami were found to spend approximately $14,423 per Medicare patient in 2010, compared with an average of $7819 per Medicare patient in Minneapolis during the same year. The authors noted that Miami has a greater diagnostic intensity than Minneapolis, indicating that the relative health measures of the populations in the 2 cities are closer than the raw spending data suggests.

“Our findings suggest that people in Miami are less sick than you would think based on the standard risk adjustment measure, and people in Minneapolis are more sicker than you would think,” Finkelstein concluded. “There’s been a lot of fascination with these geographic patterns.”