LAUSR

BACKGROUND Risk-adjustment in resource allocation is commonly used for regional redistribution or for eliminating risk selection motives of multiple statutory health insurers. In the Czech Republic, revenue redistribution between health insurers takes place since the 1990's. Since 2018, the risk-adjustment mechanism includes an adjustment for insured with chronic diseases using Pharmacy-based Cost Group (PCG) classification. In addition, retrospective compensation for very high cost patients has been strengthened. AIM To provide an internationally relevant overview of the Czech risk-adjustment system. To assess the implication of the 2018 reform for health insurers and for the development of chronic care. METHOD The framework of the Health Reform Monitor is used to analyse the policy process. Data from Czech health insurers and Czech Ministry of Health are used to assess likely impact of the reform. RESULTS The reform increases coverage of predictable individual health risks and combines prospective risk-rating with strengthened retrospective risk-sharing among insurers. The reform results in moderate changes in risk-adjusted allocations of individual insurers. CONCLUSION The Czech experience with risk-adjustment reforms is relevant for countries with multiple health insurers as well as for countries with risk-adjusted regional redistribution mechanisms. Combining prospective risk factors of age, sex, and PCGs with retrospective compensation of expensive cases limits potential losses to a manageable level, also for small risk-pools. It reduces incentives for cream skimming based on health status, enables higher use of risk-sharing contracts, and incentivizes the development of disease management programs in the Czech Republic.