Maryland's Global Hospital Budgets: Impacts on Medicare Cost and Utilization for the First 3 Years.

BACKGROUND: Global budgets have been proposed as a way to control health care expenditures, but experience with them in the United States is limited. Global budgets for Maryland hospitals, the All-Payer Model, began in January 2014. OBJECTIVES: To evaluate the effect of hospital global budgets on health care utilization and expenditures. RESEARCH DESIGN: Quantitative analyses used a difference-in-differences design modified for nonparallel baseline trends, comparing trend changes from a 3-year baseline period to the first 3 years after All-Payer Model implementation for Maryland and a matched comparison group. SUBJECTS: Hospitals in Maryland and matched out-of-state comparison hospitals. Fee-for-service Medicare beneficiaries residing in Maryland and comparison hospital market areas. MEASURES: Medicare claims were used to measure total Medicare expenditures; utilization and expenditures for hospital and nonhospital services; admissions for avoidable conditions; hospital readmissions; and emergency department visits. Qualitative data on implementation were collected through interviews with senior hospital staff, state officials, provider organization representatives, and payers, as well as focus groups of physicians and nurses. RESULTS: Total Medicare and hospital service expenditures declined during the first 3 years, primarily because of reduced expenditures for outpatient hospital services. Nonhospital expenditures, including professional expenditures and postacute care expenditures, also declined. Inpatient admissions, including admissions for avoidable conditions, declined, but, there was no difference in the change in 30-day readmissions. Moreover, emergency department visits increased for Maryland relative to the comparison group. CONCLUSIONS: This study provides evidence that hospital global budgets as implemented in Maryland can reduce expenditures and unnecessary utilization without shifting costs to other parts of the health care system.

Effects of Global Budget Payments on Vulnerable Medicare Subpopulations in Maryland.

There is little evidence regarding population equity in alternative payment models (APMs). We aimed to determine whether one such APM, the Maryland All-Payer Model (MDAPM), had differential effects on subpopulations of vulnerable Medicare beneficiaries. We utilized Medicare fee-for-service claims for beneficiaries living in Maryland and 48 comparison hospital market areas between 2011 and 2018. We used doubly robust difference-in-difference-in-differences regression models to estimate the differential effects of MDAPM on Medicare beneficiaries by dual eligibility for Medicare and Medicaid, disability as original reason for Medicare entitlement, presence of multiple chronic conditions (MCC), race, and rural residency status. Dual, disabled, and beneficiaries with MCC had greater reductions in expenditures and utilization than their counterparts. Hospitals may have prioritized high-cost, high-need patients as they changed their care delivery practices. The percentage of hospital discharges with 14-day follow-up was significantly lower for disadvantaged subpopulations, including duals, disabled, and non-White.

Impacts of Maryland's Global Budgets on Medicare and Commercial Spending and Utilization.

In 2014, Maryland incorporated global budgets into its long-running all-payer rate-setting model for hospitals in order to improve health, increase health care quality, and reduce spending. We used difference-in-differences models to estimate changes in Medicare and commercial insurance utilization and spending in Maryland relative to a hospital-based comparison group. We found slower growth in Medicare hospital spending in Maryland than in the comparison group 4.5 years after model implementation and for commercial plan members after 4 years. We identified reductions in Maryland Medicare admissions but no changes for commercial plan members, although their inpatient spending declined. Relative declines in emergency department and other hospital outpatient spending in Maryland drove slower Medicare hospital spending growth, saving $796 million. Our findings suggest global budgets reduce hospital spending and utilization but aligning incentives between hospital and nonhospital providers may be necessary to further reduce utilization and total spending.

The contribution of "plasticity" to modeling how a community's need for health care services can be met by different configurations of physicians.

This article introduces the concept of "plasticity" to health care workforce modeling and policy analysis. The authors define plasticity as the notion that individual physicians within the same specialty each provide a different scope of service, while the scope of service of physicians in different specialties may overlap. This notion represents a departure from the current, silo-based conception of physician supply as physician headcounts by specialty; the implication is that multiple configurations of physicians (and, by further application, other health care professionals) can meet a community's utilization of health care services.Within-specialty plasticity and between-specialty plasticity are two facets of plasticity. Within-specialty plasticity is the idea that individual physicians within the same specialty may each provide a different mix and scope of services, and between-specialty plasticity is the idea that patterns of service provision overlap across specialties. Changes in physician specialty supply in a community affect both the between-specialty and within-specialty plasticity of that community's physicians. Notably, some physician specialties are more "plastic" than others.The authors demonstrate how to implement a plasticity matrix by assessing the sufficiency of physician supply in a specific community (Wayne County, North Carolina). Additional literature and data can provide further insights into the influences on (and of) plasticity, improving this approach and expanding it to include task-shifting across health care professions.

An evaluation of recent federal spending on comparative effectiveness research: priorities, gaps, and next steps.

The American Recovery and Reinvestment Act of 2009 included new funding for developing better evidence about health interventions, with a down payment of $1.1 billion for comparative effectiveness research. Our analysis of funds allocated in the legislation found that nearly 90 percent of the $1.1 billion will eventually be spent on two main types of activity: developing and synthesizing comparative effectiveness evidence, and improving the capacity to conduct comparative effectiveness research. Based on our analysis, priorities for the new funding should include greater emphasis on experimental research; evaluation of reforms at the health system level; identification of effects on subgroups of patients; inclusion of understudied groups of patients; and dissemination of results.