Towards the inclusion of health state in the israeli risk-adjustment scheme using medical diagnoses - Some intermediate results

Background: A proper risk-adjustment mechanism in the allocation of funds to the health funds is a key element in the efficiency and equity of the health system. Since 1995, the Israeli risk-adjustment is based only on age, while, in many similar systems, considerable effort has been made to include health state as a risk-adjuster. Objectives: This study aims to suggest a risk-adjusted capitation scheme based on inpatient diagnoses. Methods: Using the DxCG software and the MOH's hospitalization database for the period 1994-1997, the authors built a preliminary model to predict inpatient costs at a given year, based on diagnoses, age and sex in previous-year hospitalizations. The second stage, in which total health care costs are predicted based on the same previous-year information, has not been realized because of lack of cooperation from the health funds. Results: The use of the DxCG diagnoses model with the Israeli data is feasible. However, further research is needed to construct the best Israeli model. The prediction of inpatient cost according to the diagnoses model is superior to that obtained by the demographic model.