Michael Dermer

Basic “explainer” on Risk Adjustment and a RAF conundrum. This article from The Commonwealth Fund does a good job of providing the basics of risk adjustment. It also calls out one of the major contributors to patient outcomes that isn’t captured in traditional risk models, the Social Determinants of Health (SDoH). They do a great job on this, so I won’t summarize it here. However, I think there is another factor that isn’t captured that I wanted to discuss and would appreciate some different perspectives. I’d love to get some thoughts on the following. Maybe I am simply being pedantic. The issue not mentioned in the article that I think current methodologies of risk adjustment miss is duration and management of disease. A patient with a new diagnosis of diabetes, for example, now has an elevated risk of numerous complications over their lifetime. However, that risk in year 1 after the initial diagnosis is much lower than the risk at year 10. Current risk models don’t take that escalating risk into consideration, keeping the risk adjustment fixed regardless of duration of underlying diagnosis. In addition, there are few scenarios that will impact me differently as the provider: 1) Management of this patient’s diabetes has been poor for the prior 9 years and now my group “inherits” this patient at year 10. 2) My team has helped this patient manage their diabetes very well for the past 9 years. 3) For the past 9 years, this patient’s prior group had managed their diabetes well but they have now switched into my group. As noted above, in scenario 1, that “new” diagnosis of diabetes severely underestimates this patient’s risk of needing expensive resources this upcoming year. I will be adversely impacted from something that is clinically obvious (duration of a disease increases risks) but which is not captured in the current data. To go one step farther, in frameworks 2 and 3, there is a gap between what the patient’s risk would have been without 9 years of great care and what it likely is now. However, there is no recognition of this work. That is to say, if the patient switched to a group that did a terrible job of managing diabetes, they’d receive the same risk adjustment in year 10 as my group would receive after all of our time, effort and resources had been dedicated to keeping this patient healthy. If the patient’s healthcare needs in year 10 are low because of our efforts, shouldn’t we receive more credit than a group that simply gets attribution? And, what about the prior group? How are (were?) their efforts recognized? Please share your thoughts in the comments.

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VERY frustrating healthcare insurance cost forecast from JP Morgan! Yet complicated authorizations, time consuming denials on standard of care and growing unworthy appeals are abundant in the offices of providers and Hospitals. Please check out this report that discussed the expected costs and continued rise in insurance premium costs despite record breaking profits for the commercial insurance industry. 1. UnitedHealth Group: $22.4 billion Total net earnings in 2023 were $22.4 billion, up 11.2% year over year. UnitedHealthcare's total earnings from operations in 2023 were $16.4 billion, up 14.2% year over year. 2. CVS Health: $8.3 billion Total net income in 2023 was $8.3 billion, up from $4.3 billion in 2022. Aetna reported nearly $5.6 billion in adjusted operating income for 2023. 3. Elevance Health: $6 billion Total net income in 2023 was nearly $6 billion, up 1.6%. The insurance division reported a total operating gain of $6.9 billion in 2023, up 14.4%. 4. Cigna Group: $5.2 billion Total net income in 2023 was nearly $5.2 billion, down 23% year over year. The insurance side of the business, Cigna Healthcare, reported an operating income of $4.2 billion in 2023. 5. Centene: $2.7 billion Total net income in 2023 was $2.7 billion, up 124% year over year. In the fourth quarter, net income was $45 million, compared to a loss of $219 million year over year. 6. Humana: $2.5 billion Total net income totaled nearly $2.5 billion in 2023, down 11.3%. The company's insurance segment reported an operating income of $2.7 billion in 2023. #physicians #hospitals #healthcare #insurers https://lnkd.in/gst6CS9y https://lnkd.in/g6su6SuJ

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💼 Outcome Health Scandal: A $1 Billion Corporate Fraud Unveiled 💼 In a landmark case, three former executives of Outcome Health, a health tech startup based in Chicago, have been convicted in a $1 billion fraud scheme. The executives, including co-founder and former CEO Rishi Shah, former president Shradha Agarwal, and former COO Brad Purdy, were found guilty of defrauding the company's clients, lenders, and investors. Outcome Health installed screens and tablets in doctors' offices to display pharmaceutical ads, but the company sold more advertising inventory than it could deliver. They invoiced clients for full delivery despite significant under-deliveries, inflating metrics to show higher patient engagement. These fraudulent activities led to material overstatements of revenue, which were used to secure significant debt and equity financing. This case highlights the complex and deceptive practices that can occur within corporate structures. It emphasizes the importance of implementing advanced forensic accounting techniques and thorough auditing processes. Ensuring transparency and accountability within corporate governance structures is essential to protect stakeholders and maintain trust in the financial system. #CorporateFraud #FinancialIntegrity #RiskManagement #CorporateGovernance

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