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Old 11-04-2019, 04:31 PM
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The Obese Dog The Obese Dog is offline
Join Date: Jan 2008
Posts: 471

Originally Posted by WhosOnFirst View Post
Per the article, "At a given risk score, Black patients are considerably sicker than White patients, as evidenced by signs of uncontrolled illnesses. Remedying this disparity would increase the percentage of Black patients receiving additional help from 17.7 to 46.5%." This isn't about parity. This is about the risk scores for black people being set lower than risk scores for white people.

It may not be possible to build a model that doesn't produce adverse impact. If that is the case, then a company shouldn't use the model. You may be right that the proposed fix still produces adverse impact. It is very possible to test that and it should be tested. If it does produce adverse impact, than it shouldn't be used. This is not an opinion thing, this is a legal issue. I encourage you to read up on the history of red-lining in the insurance industry. Modern modeling provides a justification to this exact same sort of behavior. It doesn't matter if it was intentional or not or even if the modeling is correct (like if blacks really did need less care than whites*), the practice is illegal any time adverse impact is created on a protected class.

In concept I agree, a rising tide floats all boats as it were. And UHG may be able to persuade NY that this is the case and not be found guilty of any wrong doing. However, prima facie, assigning lower risk scores to blacks is going to be a hard argument to overcome. We can look at some history to see what might actually happen. Do you remember UHG's Ingenix? They were the gold standard of aggregated data for the health insurance industry. Everybody used their data to determine what appropriate out of network charges were. NY sued insurers saying that the Ingenix database artificially lowered what the insurance companies should have been paying to doctors. As an industry insider, the entire case seemed without merit because how else are you going to set a U&C rate? Regardless, UHG lost the case and paid like $400 million is penalties (don't quote me on that number). The final outcome was that a non-profit was created to do the exact same function that Ingenix previously performed.

Maybe that is the final solution, if you want to sell a product that discriminates it has to be sold via a different type of company that doesn't have to adhere to the same regulations as an insurer.

I have no illusions about how difficult it is to build models that don't have an adverse impact. Sometimes it is boarding on the impossible. When it is, those models can't be used in practice. I've built and/or tested plenty of models that needed to be shelved because of this exact reason and each of them was. Or we went back to the drawing board to see if the concept could be modified to stay on the correct side of the law.

* Not a position I'm advocating
Thanks, that was informative.
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