Bayesian Risk Adjustment Models

Bayesian Risk Adjustment Models are statistical tools used to estimate and compare the health risks of different individuals or groups by incorporating both existing data and prior knowledge. They start with initial information (prior beliefs) about health outcomes and update these beliefs as new data becomes available, resulting in more accurate risk assessments. This approach helps insurers, healthcare providers, and policymakers better understand and manage healthcare costs and resources by accounting for individual health differences in a principled, transparent way.