Impact of Area Deprivation Index on the Performance of Claims-Based Risk-Adjustment Models in Predicting Health Care Costs and Utilization.

Traditionally, risk-adjustment models do not address the characteristics of minority populations, such as race or socioeconomic status. This study aimed to evaluate the added value of place-based social determinants on risk-adjustment models in explaining health care costs and utilization. Statewide commercial claims from the Maryland Medical Care Database were used, including 1,150,984 Maryland residents aged 18 to 63 with ≥6 months enrollment in 2013 and 2014. Area Deprivation Index (ADI) was assigned to individuals through zip code. The authors examined the addition of ADI to predictive models of concurrent and prospective costs and utilization; linear regression was adopted for costs and logistic regression for utilization markers. Performance measures included R2 for costs (total, pharmacy, and medical costs) and the area under the curve (AUC) for utilization (being top 5% top users, having any hospitalization, having any emergency room [ER] visit, having any avoidable ER visit, and having any readmission). All performance measures were derived from the bootstrapping analysis with 200 iterations. Study subjects were ∼48% male with a mean age of ∼41 years. Adding ADI to the demographics or claims-based models generally did not improve performance except in predicting the probability of having any ER or any avoidable ER visit; for example, AUC of avoidable ER visits increased significantly from .610 to .613 when using ADI rank deciles in claims-based models. Future research should focus on patients with a higher need for social services, assess more granular place-based determinants (eg, Census block group), and evaluate the added value of individual social variables.