Risk-Adjustment: A Six-Country Study

Insurance risk-adjustment is one way in which six countries in Europe are trying to address the health care needs of their populations and control costs and efficiency. Pharmaceutical Partners For Better Healthcare, an organization made up of 40 members of the research-based pharmaceutical industry around the world, has carried out a study which looks at the experiences of the Czech Republic, England, Germany, the Netherlands, Switzerland and the USA, and how they are trying to encourage insurers and sickness funds to focus on efficiencies in health plans rather than the health-risk profile of members, to improve fairness and cost-control in health care.

The report, What Risk-Adjustment Can Do, by Nancy Mattison and Monica Ryser-Cseri, suggests that risk-adjustment is a potentially powerful tool for improving fairness in health care, while still controlling costs.

The authors say that risk-adjustment can improve health care by: encouraging efficiency and keeping health care costs down through competition, ensuring equity by reducing incentives for insurance plans or sickness funds to "cream-skim;" increasing consumer choice among insurance plans; and encouraging quality by providing incentives for insurers to tailor benefits to meet the customer's needs.