Risk Stratification
Risk stratification is the process of classifying patients into risk tiers based on their likelihood of future high-cost events, health deterioration, or hospitalisation — enabling care teams to allocate limited care management resources to patients with the greatest need and preventable risk.
What is Risk Stratification?
Risk stratification is the systematic classification of a patient population into risk tiers — typically low, moderate, and high — based on their predicted likelihood of experiencing adverse outcomes such as hospitalisation, readmission, ED utilisation, or significant health deterioration. The goal is not to predict with certainty who will deteriorate, but to prioritise where limited care management capacity should be focused to maximise preventable harm reduction.
Risk Stratification Tools
- HCC-based Risk Score: Medicare's Hierarchical Condition Category model calculates a Risk Adjustment Factor (RAF) score based on documented diagnoses. Higher RAF = more complex, higher-cost patient. Useful for identifying high-risk patients in Medicare populations.
- LACE Score: Validated 4-factor tool for post-discharge readmission risk (Length of stay, Acuity, Comorbidities, ED visits). Score ≥10 = high risk.
- Charlson Comorbidity Index (CCI): 17-category comorbidity weighting system based on ICD-coded diagnoses. Higher CCI = greater predicted 10-year mortality and future healthcare utilisation.
- Utilisation-based stratification: Identifying patients with ≥2 ED visits, ≥1 hospitalisation, or ≥4 specialist visits in past 12 months as a practical proxy for high-need patients.
- Commercial predictive models: Proprietary algorithms (e.g., Verisk/IMS, 3M CRG, Cotiviti) using claims data to predict future high cost, hospitalisation, or specific disease complications.
The 5% Problem
Healthcare resource utilisation follows an extreme Pareto distribution: approximately 5% of patients account for 50% of healthcare costs. The top 1% — patients with multiple complex chronic conditions, mental health comorbidities, and frequent hospitalisations — account for 20–25% of all healthcare costs. Effective risk stratification identifies this high-risk 5% for intensive care management, potentially avoiding $30,000–$100,000+ in annual expenditures per patient through coordinated chronic disease management and ED diversion.
Matching Interventions to Risk Tiers
Risk tiers should be matched to appropriately intensive (and expensive) interventions: low-risk patients receive automated preventive care reminders and portal outreach; moderate-risk patients receive CCM enrolment and care coordinator telephone outreach; high-risk patients receive complex care management with embedded social work, pharmacy, and specialist coordination. Applying high-intensity interventions to low-risk patients wastes resources; failing to engage high-risk patients is the core failure mode of population health programmes.