Risk-Adjustment Methods Based on Health Status and Functional Status

Abstract

<h3>To the Editor.</h3> —In the article by Dr Fowles and colleagues¹comparing risk-adjustment methods for setting capitation rates, the authors conclude that risk adjustments based on diagnostic information available from administrative data or self-reported chronic conditions should be used rather than adjusting for functional status measures, such as the Medical Outcomes Study 36-Item Short-Form Functional and Perceived Health Status Survey (SF-36). However, their data demonstrate that such a functional status measure performs just as well, if not better, than diagnosis-based adjustments, particularly among high-risk persons older than 65 years. Adjustment using diagnosis-based ambulatory care groups predicted health care expenditures within 5% of actual expenses for 75% of the persons older than age 65 who were categorized as high risk. In contrast, SF-36-adjusted data were similarly accurate in 85% of the older high-risk persons. The authors suggest a number of reasons for preferring administrative claims or encounter data for adjusting