• Competitive risk adjustment, not so nuts

    I’ve fixed my earlier post on competitive risk adjustment. Mistakes happen and I had a whopper in it. But that’s gone now and explained tersely and, likely to many, incomprehensibly in a note at the end of that post.

    Meanwhile, I’ve heard from some colleagues who know what they’re talking about* that the idea expressed in that post is not nuts. In fact, it’s one that has been contemplated in the past, though as far as I know not documented anywhere. It hadn’t been formally proposed because it had been viewed as too big a step. Simpler competitive bidding for Medicare plans has been contemplated and fought for and against for decades. Given that, anything more ambitious seems like too much.

    Anyway, I’m pleased to know that the idea has some merit. That’s enough for me. It’s good to have something in mind that might improve risk adjustment. If standard risk adjustment approaches turn out to be inadequate in plan exchanges with or without a public option, there is an off-the-shelf idea that can be refined and put to use.

    * I’m not mentioning the colleagues by name only because I haven’t bothered to ask them if it is OK to do so. There’s no reason why it wouldn’t be, that I know of, but it is my style to always ask. I don’t feel like bothering them about this, so let’s just leave it at that.

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