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Using industry leading methods and software products, this article explores the potential for health risk adjustment in the Department of Defense (DoD) Military Health System. From an epidemiologic perspective, the study assesses whether DoD populations enrolled to and served by different provider groups exhibit sufficient variation in risk to justify changes in resource allocation, such as staffing, services, and facility modification. In addition, the study investigates whether systematic differences in risk exist between TRICARE enrollees and commercially insured enrollees. Given the interest of the DoD in managed care, risk prediction tools are shown to project future risk for individuals with sufficient accuracy to justify development of disease management programs for patients with chronic conditions. Analyses demonstrate that Military Health System data support industry requirements to perform risk grouping among a random sample of 200,000 enrollees selected from 495,941 eligible enrollees.

The Potential of Risk Adjustment for the Military Health System TRICARE Program