Toward risk adjustment in mental health in Israel: calculation of risk adjustment rates from large outpatient and inpatient databases

In 2015, mental health services were added to the Israeli National Health Insurance package of services. As such, these services are financed by the budget which is allocated to the Health Plans according to a risk adjustment scheme. An inter-ministerial team suggested a formula by which the mental health budget should be allocated among the Health Plans. Our objective in this study was to develop alternative rates based on individual data, and to evaluate the ones suggested.

The derivation of the new formula is based on our previous study of all psychiatric inpatients in Israel in the years 2012–2013 (n = 27,446), as well as outpatients in one psychiatric clinic in the same period (n = 6115). Based on Ministry of Health and clinic data we identified predictors of mental health services consumption. Age, gender, marital status and diagnosis were used as risk adjusters to calculate the capitation rates for outpatient care and inpatient care, respectively. All prices of services were obtained from the Ministry of Health tariffs. These rates were modified to include non-users using restricted models.

The mental health capitation scales are typically “humped” with regard to age. The rates for ambulatory care varied from a minimum 0.19 of the average consumption for males above the age of 85 to a maximum of 1.93 times the average for females between the ages of 45–54. For inpatient services the highest rate was 409.25 times the average for single, male patients with schizophrenia spectrum diagnoses, aged 45–54. The overall mental health scale ranges from 2.347 times the average for men aged 45–54, to 0.191 for women aged 85+. The modified scale for the entire post-reform package of benefits (including both mental health care and physical health care) is increasing with age to 4.094 times the average in men aged over 85. The scale is flatter than the pre-reform scale.

The risk adjustment rates calculated for outpatient care are substantially different from the ones suggested by the inter-ministerial team. The inpatient rates are new, and indicate that for patients with schizophrenia, a separate risk-sharing arrangement might be desirable. Adopting the rates developed in this analysis would decrease the budget shares of Clalit and Leumit with their relatively older populations, and increase Maccabi and Meuhedet’s shares. Future research should develop a risk-adjustment scheme which covers directly both mental and physical care provided by the Israeli Health Plans, using their data.