3M Commentary

Risk Adjustment and Socioeconomic Status – The NQF Task Force Report

July 18, 2014 / By Norbert Goldfield, MD, Richard Fuller, MS

I was fortunate to serve on the NQF Task Force on Risk Adjustment for Socioeconomic Status or other Sociodemographic Factors (SDF)i. This report generated more comments than any other NQF Task Force Report – ever. Of the 700 comments received in reaction to the draft report, the vast majority (more than 98%) were in favor. CMS was one of a very small number of institutions opposed to the initial report. While the final report contains significant modifications to the initial report, much of the spirit and substance remains.

The draft task force report is just that – a draft – and it has not yet been endorsed by the NQF board. Board review will occur after an intermediate board reviews the report. This blog and subsequent blogs will review the content of the report, track its progress, and highlight implications for the work that we do as developers of risk adjustment or case mix classification methodologies. These systems are implemented for quality outcomes and payment adjustment by many providers for which SDF is critical. As a task force member, I am absolutely supportive of the tenor and substance of the report, but from an implementation point of view my opinion may differ slightly, in part because of the categorical or DRG type model approach that is embedded in all the work that we do.

The NQF task force tried to answer this question: “How would the performance of various units compare if hypothetically they had the same mix of patients?”

The bottom line response from our report: “Because healthcare outcomes are a function of patient attributes (including SDF as well as the care received, and patients are not randomly assigned to units for healthcare services so that all have the same mix of patients), risk adjustment is essential to ensuring an “apples with apples” comparison when examining outcome performance in real-world settings.”

Among the report’s 10 key recommendations are the following:

  • Include socio-demographic factors in risk adjustment. While alternative options are providedii the default is that socio-demographic factors should be included.
  • “When performance measures are used for accountability applications such as public reporting and pay-for-performance, then purchasers, policymakers and other users of performance measures should assess the potential impact on disadvantaged patient populations and the providers/health plans serving them to identify unintended consequences and to ensure alignment with program and policy goals. Additional actions such as creating peer groups for comparison purposes could be applied.”iii
  •  “NQF and others such as CMS, Office of the National Coordinator (ONC) for Health Information Technology, and the Agency for Healthcare Research and Quality (AHRQ) should develop strategies to identify a standard set of sociodemographic variables (patient and community-level) to be collected and made available for performance measurement and identifying disparities.”iv

In the final analysis, the final report attempted to thread the needle between these two opposing points of view:

  1.  Adjusting performance measures for sociodemographic factors is essential to making fair comparative conclusions about quality.
  2.  Adjusting performance measures for sociodemographic factors should not be done because it obscures disparities and implies that differences in outcomes based on SDF are expected and accepted.

While I agree with both points of view (as did the vast majority of panel members), I would argue that the strength of a categorical or rules based model is that the clinical model can be expanded to include factors that may not statistically “work” but have face validity (e.g. certain major chronic mental health disorders). In addition, a categorical model can separately add in (on top of the clinical categorical model) SDF factors that have face validity but may not statistically work (such as lack of social support or income).

The next blogs will address this important report from both a statistical and a clinical point of view. In short, the NQF report represents a positive milestone in efforts to deal with a critical issue facing our society – the fact that disadvantaged populations in the U.S. and virtually everywhere have worse outcomes. Unfortunately, there are systemic challenges that impact the NQF that may limit the ultimate usefulness of this report.

Norbert Goldfield, MD, is Medical Director for 3M Health Information Systems.


iRisk Adjustment for Socioeconomic Status or other Sociodemographic Factors July 2, 2014. http://www.qualityforum.org/risk_adjustment_ses.aspx
iiPage V of the Technical Report.
iiiPage VI
ivPage VI