Risk adjustment for regional healthcare funding allocations with ensemble methods: an empirical study and interpretation.

We experiment with recent ensemble machine learning methods in estimating healthcare costs, utilizing Finnish data containing rich individual-level information on healthcare costs, socioeconomic status and diagnostic data from multiple registries. Our data are a random 10% sample (553,675 observations) from the Finnish population in 2017. Using annual healthcare cost in 2017 as a response variable, we compare the performance of Random forest, Gradient Boosting Machine (GBM) and eXtreme Gradient Boosting (XGBoost) to linear regression.