PFM Articles 
Improving Health Care by Linking Risk Adjustment and Condition-Specific Quality Measurement
HAROLD S. LUFT, PHD, R. ADAMS DUDLEY, MD, MBA, AND THE IMPROVING
PFM, Vol. 2 No. 4,
(2002)
When paid a fixed amount per capita, even if adjusted by
demographic risk factors, health plans have financial incentives to avoid
providing expensive services, especially those needed on a chronic basis.
Since routine measurement of quality of care is limited primarily to
preventive service utilization, the potential for patients with serious chronic
disease to receive poor quality care is significant. We argue that both
adjustment of payments to health plans based on the illness burden among
their enrollees and measurement of quality of care will be necessary to
ensure health plans provide high quality care. For some costly chronic
diseases, condition-specific risk adjustment and quality measurement using
data already collected for clinical management purposes may be necessary.
We provide two examples (HIV and CF) and discuss the implications for
information systems.
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