Social Risk Adjustment in Health Care Performance Measures

The number of value-based purchasing programs, which leverage financial rewards and penalties to incentivize health care provider (eg, hospitals and physicians) improvements in quality measures, has increased in past years. Although adjustment for patient health status and other clinical factors is widely accepted, questions about accounting for social risk in health care performance measurement remain. The study by Cher et al¹ contributes to this debate, specifically in the area of surgical readmissions. Using 2 complementary data sets, the authors evaluated whether dual eligibility, which was measured by whether patients had Medicare and Medicaid coverage, was associated with all-cause 30-day hospital readmission. Patient dual-eligibility status was not associated with hospital readmission after additional clinical measures and American Society of Anesthesiologists classification of physical status and functional status were included in risk adjustment. Including dual-eligibility status in risk adjustment models was also associated with small changes in hospital readmission rates and rankings. The authors concluded that dual-eligibility status served as proxy for unmeasured clinical factors.

Dual-eligibility status is one of many measures of social risk. Social risk factors are constructs that influence health, health-related processes, and health care outcomes. Social risk adjustment involves accounting for social risk factors in risk adjustment. The decision whether to include social factors such as socioeconomic position and racial/ethnic contexts in risk adjustment for performance measures is controversial. Critics have voiced concerns that social risk adjustment can mask disparities in care (eg, differential treatment of patients by insurance type or financial circumstances) and noted that accounting for social risk factors tacitly lowers quality standards for disadvantaged patients. Citing these concerns, the National Quality Forum initially discouraged the inclusion of social risk factors.² The National Quality Forum has since recommended that social risk measures be assessed individually and considered in adjustment when conceptual and empirical evidence supports the inclusion of the measure as a social risk factor.

Proponents of social risk adjustment argue that we should not penalize physicians and hospitals if their patients have different risk profiles, whether those profiles are clinical or social, and that not adjusting for these factors may induce selection on observable characteristics (eg, treating the healthiest patients). Excluding social risk factors from performance metrics can disproportionately penalize hospitals caring for poorer and sicker patients. One such example is the Centers for Medicare & Medicaid Services Health Readmissions Reduction Program. Under the Health Readmissions Reduction Program, safety-net hospitals were more often penalized and faced larger penalties than non–safety-net hospitals.³ To address this concern, Congress passed the 21st Century Cures Act, which directed the Centers for Medicare & Medicaid Services to evaluate hospitals’ performance relative to peer hospitals with similar proportions of patients dually eligible for Medicare and Medicaid.

When accounting for social risk in excess hospital readmissions, it remains unclear which social domains and measures (eg, health literacy, household income, or educational level) should be included. The study by Cher and colleagues¹ implies that dual-eligibility status captures unmeasured clinical complexity and may not uniquely be associated with readmissions among surgical patients. Although this study focused on patient-level social risk, hospital-level or community-level social factors such as percentage of patients with low incomes and neighborhood socioeconomic status can be associated with hospital performance and patient outcomes.^4,5 There is also evidence that hospital-level and community-level social risk factors may explain a large proportion of readmission risk.^2,6,7

There are concerns that programs such as the Health Readmissions Reduction Program have unintended consequences that disproportionately affect disadvantaged communities.^3,8 In addition to social risk adjustment, financial incentives can be targeted to reward improvements in health equity and clinical outcomes for the most vulnerable patients. At the same time, the Centers for Medicare & Medicaid Services can adopt and support initiatives that address social determinants of health within and outside health care systems. Examples include aligning community benefits provided by tax-exempt hospitals with social investments and Kaiser Permanente’s efforts to connect their members with community services. Although traditionally considered outside the scope of health care systems, addressing social determinants of health may provide long-lasting benefits with regard to the health of vulnerable populations.

Published: June 10, 2020. doi:10.1001/jamanetworkopen.2020.8020

Open Access: This is an open access article distributed under the terms of the CC-BY License. © 2020 Tran LD. JAMA Network Open.

Corresponding Author: Linda Diem Tran, S-SPIRE Center, 1070 Arastradero Rd, Palo Alto, CA 94304 (diemtran@stanford.edu).

Conflict of Interest Disclosures: None reported.