Changes in Health Care Use Associated With the Introduction of Hospital Global Budgets in Maryland

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Abstract

Importance

In 2014, the State of Maryland placed the majority of its hospitals under all-payer global budgets for inpatient, hospital outpatient, and emergency department care. Goals of the program included reducing unnecessary hospital utilization and encouraging greater use of primary care.

Objective

To compare changes in hospital and primary care use through the first 2 years of Maryland’s hospital global budget program among fee-for-service Medicare beneficiaries in Maryland vs matched control areas.

Design, Setting, and Participants

We matched 8 Maryland counties (94 967 beneficiaries) with hospitals in the program to 27 non-Maryland control counties (206 389 beneficiaries). Using difference-in-differences analysis, we compared changes in hospital and primary care use in Maryland vs the control counties from before (2009-2013) to after (2014-2015) the payment change, using 2 different assumptions. First, we assumed that preintervention differences between Maryland and the control counties would have remained constant past 2014 had Maryland not implemented global budgets (parallel trend assumption). Second, we assumed that differences in preintervention trends would have continued without the payment change (differential trend assumption).

Main Outcomes and Measures

Hospital stays (defined as admissions and observation stays); return hospital stays within 30 days of a prior hospital stay; emergency department visits that did not result in admission; price-standardized hospital outpatient department (HOPD) utilization; and visits with primary care physicians (overall and within 7 days of a hospital stay).

Results

We matched 8 Maryland counties with hospitals in the program (94 967 beneficiaries; 41.8% male; mean [SD] age, 72.3 [12.2] years) to 27 non-Maryland control counties (206 389 beneficiaries; 42.8% male; mean [SD] age, 71.7 [12.5] years). Assuming parallel trends, we estimated a differential change in Maryland of −0.47 annual hospital stays per 100 beneficiaries (95% CI, −1.65 to 0.72; P = .43) from the preintervention period (2009-2013) to 2015, but assuming differential trends, we estimated a differential change in Maryland of −1.24 stays per 100 beneficiaries (95% CI, −2.46 to −0.02; P = .047). Assuming parallel trends, we found a significant increase in primary care visits (+10.6 annual visits/100 beneficiaries; 95% CI, 4.6 to 16.6 annual visits/100 beneficiaries; P = .001), but assuming differential trends, we found no change (−0.8 visits/100 beneficiaries; 95% CI, −10.6 to 9.0 visits/100 beneficiaries; P = .87). Comparing estimates with both trend assumptions, we found no consistent changes in emergency department visits, return hospital stays, HOPD use, or posthospitalization primary care visits associated with Maryland’s program.

Conclusions and Relevance

We did not find consistent evidence that Maryland’s hospital global budget program was associated with reductions in hospital use or increases in primary care visits among fee-for-service Medicare beneficiaries after 2 years. Evaluations over longer periods should be pursued.

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