Understanding Patient Risk and its Impact on Chronic and Non-Chronic Member Trends

A common method of performing commercial and government (ie, Medicare, Medicaid) disease management (DM) program savings evaluations-and the basis of DMAA's Guidelines-is the adjusted historical control method. This method uses a trend adjustment to adjust for the effects of utilization and unit cost changes over time. An appropriate trend adjuster is one that is based on a population with a constant-risk profile, so that utilization and price effects may be measured without being confounded by population changes. Previous literature has demonstrated that the method of identification of chronic and non-chronic members and the timing of the member's transfer between populations has a significant influence on the measured trends in the 2 populations, and thereby on the measured savings from a DM intervention program. The application of risk-adjustment methods to the non-chronic population can correct for this change in risk profiles and ensure a constant-risk population. This method may be used for the non-chronic trend estimation, and will result in an unbiased population trend estimate. However, the chronic population presents different problems for trend adjustment. Because the chronic population is subject to intervention, the application of risk adjustment to this population would potentially neutralize the effect of the outcome that the evaluation is attempting to capture. This paper addresses an alternative method of performing the standard DM savings calculation, which aims to avoid confounding from changes in the chronic population risk profiles due to extrinsic factors. (Population Health Management 2008;11:261-267)