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Generalized modeling approaches to risk adjustment of skewed outcomes data
Open accessAbstract
There are two broad classes of models used to address the econometric problems caused by skewness in data commonly encountered in health care applications: (1) transformation to deal with skewness (e.g., ordinary least square (OLS) on ln(y)); and (2) alternative weighting approaches based on exponential conditional models (ECM) and generalized linear model (GLM) approaches. In this paper, we encompass these two classes of models using the three parameter generalized Gamma (GGM) distribution, which includes several of the standard alternatives as special cases-OLS with a normal error, OLS for the log-normal, the standard Gamma and exponential with a log link, and the Weibull. Using simulation methods, we find the tests of identifying distributions to be robust. The GGM also provides a potentially more robust alternative estimator to the standard alternatives. An example using inpatient expenditures is also analyzed.
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“exponential weighting has previously been used in both medical42–44 and non-medical45 46 error/risk analysis.”
From Clinical AI Scribes in primary care: accuracy, error severity and implications for clinical practice (2025) · cites this paper as [44]
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Metadata
- Authors
- Manning, W. G., Basu, A., & Mullahy, J.
- Affiliations
- University of Chicago (US)
- National Bureau of Economic Research (US)
- Corresponding author
- Manning, Willard G.
- Venue
- Journal of Health Economics
- Publisher
- Elsevier BV
- Published
- 2005-05
- Volume
- 24
- Issue
- 3
- Pages
- 465-488
- ISSN
- 0167-6296 (ISSN-L)
- OpenAlex
- W3122533613
- Cited by
- 760
- References
- 17
- Citations by year
- 2026: 21 · 2025: 27 · 2024: 29 · 2023: 32 · 2022: 38 · 2021: 40 · 2020: 43 · 2019: 52 · 2018: 51 · 2017: 52 · 2016: 41 · 2015: 57 · 2014: 46 · 2013: 56 · 2012: 42
- FWCI
- 17.64
- Type
- journal article
- Language
- en
- Open access
- green
- www.nber.org
- Locations
- Journal of Health Economics (publishedVersion)
- PubMed (publishedVersion)
- RePEc: Research Papers in Economics (submittedVersion)
- Funders
- National Institutes of Health (5r01aa012664-03)
- National Institute on Alcohol Abuse and Alcoholism (1 R01 AA 12664-01 A2)
- Topics
- Physical Sciences › Mathematics › Statistics and Probability › Statistical Distribution Estimation and Applications
- Physical Sciences › Mathematics › Statistics and Probability › Statistical Methods and Bayesian Inference
- Social Sciences › Economics, Econometrics and Finance › Economics and Econometrics › Healthcare Policy and Management
- Keywords
- risk adjustment, logarithmic transformation, generalized linear models, hospital costs
- MeSH terms
- United States, Models, Statistical, Risk Adjustment
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