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Risk adjustment facilitates meaningful comparisons of outcomes of different groups of individuals by accounting for differences across the groups in baseline characteristics that could affect their outcomes. Groups can be defined in countless ways depending on comparisons of interest, such as patients admitted to one hospital versus another, individuals receiving Treatment X versus Treatment Y, and persons in one socioeconomic stratum versus other strata. In observation studies, individuals are not randomly assigned to the groups, and, for reasons that are sometimes poorly understood, those in one group may differ in significant ways from those in other groups. These differences might affect the likelihood that the individuals will experience the outcomes of interest. For example, if patients at the neighborhood hospital are older on average than ...

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