Soapbox: Seeking a (more) perfect approach to social risk adjustment

Accurate risk adjustment is essential for value-based payment. While the concept is straightforward—outcome accountability in payment models requires estimating anticipated costs of care for different patients—the methods for calculating risk adjustment can be intricate. For instance, if risk adjustments lead to cost estimates that are too low, because they do not account for how sick or complex a population may be, clinicians and organizations in value-based payment models can unfairly incur financial losses when taking care of that population. If cost estimates are too high, payers unfairly incur losses for spending in excess of what healthcare providers need.