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Case Management: ACGs
can also be used for quality improvement, outcomes management
and case management purposes.
Quality improvement and outcomes management often involve
focusing on one or more specific diseases and comparing
a process measure (e.g., appropriate use of lab tests,
prescription of certain medications) or an outcomes measure
(e.g., asthma inpatient admissions or emergency room
visits) across several providers or health plans. In
this context, ACGs control for differences in case-mix
or severity of illnesses among the populations being
compared.
While the use of ACGs for quality improvement and outcomes management in
the aforementioned context is a retrospective activity, ACGs may also be
used prospectively for quality improvement purposes to identify patients
with special needs. Once identified, these patients, who typically suffer
from multiple, chronic conditions, can then be case managed to better coordinate
and ensure the quality of their care.
Population Health Risk:
Profiling: Profiling
is a technique for comparing the activities of one or
more health care providers. Typically, profiling involves
examination of resource utilization: dollars spent on
overall patient care or discrete services such as laboratory,
pharmacy or inpatient care. In profiling, the principal
underlying question is "How does a provider's pattern
of practice compare to that of other
providers once case-mix is accounted for?" By taking
into account the differences in illness burden among
different providers' patient populations, ACGs allow
one to determine whether variations in practice are a
result of providers having sicker patient populations
or whether these variations are actually attributable
to differences in the way providers practice medicine.
In use since 1991, the ACG Case-Mix System is by far the most widely accepted
and studied profiling software available. ACGs have been thoroughly tested
in both applied and academic settings by more than 75 different academic
and research institutions. The system is the de facto industry standard
for provider profiling and is incorporated in the majority of software
profiling products on the market today.
Rate Setting: In
the past, most insurers calculated premiums and capitation
rates based on age and gender and, less frequently, "community
rating." Today, however, with both providers and insurers
alike at risk for the care of their patient populations
coupled with the increasing numbers of chronically ill
individuals being enrolled in managed care, the need for
risk-adjusted rates that consider a wider range of characteristics
than simply age, gender and geography is critical.
While age, gender and geography can explain much of the variation in resource
consumption in very large, randomly selected population groups, in reality
few, if any, of the patient populations enrolled in managed care or other
insurance plans are truly random -- some form of selection bias is always
in play. By incorporating patient clinical characteristics -- in addition
to simply age and gender -- into the rate setting process, ACGs provide a
mechanism to improve the fairness of capitation rates by better accounting
for individuals' expected medical needs. Thus with ACGs, it is far less likely
that providers will be grossly overpaid for healthier patients and seriously
underpaid for sicker ones. By eliminating many of the incentives for under
treating sick patients inherent in capitation mechanisms based on age, gender
and geography, the ACG Case-Mix System is able to provide more appropriate
treatment incentives to providers and health care systems.
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