Risk scores and risk stratification techniques are fundamental for successful population health and cost management. Risk scores are used to assess the risk of high healthcare costs. A risk score may indicate the probability of a high cost event, such as a hospital readmission. Risk stratification is the act of dividing patients into categories of risk, based on personal and clinical characteristics.

Healthcare payers and providers both use risk scores to estimate costs, target interventions, gauge a patient’s health literacy and lifestyle choices, and try to prevent patients from developing more serious conditions that could result in higher spending and worse outcomes.

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For example, patients categorized as high risk may require a specifically assigned care manager to provide very focused, proactive and comprehensive care. HIGH RISK patients are estimated to make up about 5% of a practices patient population. According to Medicare spending stats, these patients account for about 43% of the cost for the entire population. Aggressively addressing these patients directly will have a significant impact toward the triple aim strategy of improving health, providing better care and lowering costs.

There are many opportunities for cost savings with Patients that are categorized as RISING RISK. These patients make up about 20% of a typical population and account for about 30% of the healthcare costs. The most important thing here is to keep these patients from becoming high risk. These patients may require an enhanced primary care setting such as PCMH or CPC+.

Patients with LOW RISK tend to make up as much as 75% of a population but account for only about 10% of the healthcare costs. The key here is keeping the patients in this bucket.

Improving the health of populations, reducing costs, and delivering a high quality patient experience are the three components of the Triple Aim. All three require the ability to stratify patients by risk in order to identify and properly address high-priority issues, avoid costly events and ensure that individual patient needs are met in an efficient manner.

For providers participating in value-based care arrangements, which pair financial risk with clinical outcomes, success in these key areas can help to avoid penalties for quality and stay on the positive side of shared savings or bonus payments.