- Researchers from the University of Pittsburgh and Harvard Medical School found Maryland's global budget program did not reduce hospital use or spending among rural acute hospitals between 2010 and 2013.
- The study, published in Health Affairs, compared changes in acute hospital use among Medicare beneficiaries served by rural hospitals and an in-state control population.
- The findings run contrary to a CMS evaluation, which included suburban and urban hospitals and did find spending cuts, including on outpatient services.
The state of Maryland introduced global budgets for eight rural, acute care hospitals in 2010 before expanding the program statewide in 2014. Policymakers and payers hoped that setting a fixed annual budget for hospitals rather than paying them on a fee-for-service basis would create more flexibility and encourage value-based care while controlling spending.
Past studies on Maryland's global budgets program, also called all-payer, analyzed the model's impact on hospitals after statewide implementation in 2014. This study, however, offers a hyper-focused analysis on the impact global budgets had on rural acute hospitals before and after implementation: Researchers analyzed enrollment and claims data for 100% of Maryland's fee-for-service Medicare beneficiaries from 2007 to 2013, comparing changes in hospital use among those beneficiaries before after the introduction of global budgets.
"Despite theoretical reasons why rural hospitals may be well-positioned to respond to global budget incentives, we saw no evidence that Maryland’s rural hospitals were successful in reducing hospital-based utilization beyond changes that would have been expected in the absence of global budgets," the authors of the study said.
The findings from this study compliment results from a similar report on the first two years of statewide global budgets in Maryland, published by JAMA Internal Medicine in February.
Both the JAMA Internal Medicine and Pitt/Harvard findings, however, diverge from CMS' evaluation of Maryland's global budgets model, published last week. That evaluation found that Maryland's program reduced "both total expenditures and total hospital expenditures for Medicare beneficiaries without shifting costs to other parts of the healthcare system."
While the authors of the Pitt/Harvard study conclude that their results "underscore the need for policymakers to consider incentives for behavior change among hospitals and physicians," they add that Maryland has already begun to address the limitations of its global budgets model. The state is working with hospitals to improve care coordination and management of patients with chronic conditions.
Many states are taking more control of their healthcare systems under the Trump administration, which backs conservative policies like Medicaid work requirements and mandatory premiums. But bluer states like Maryland are also looking for ways to save money without sacrificing care quality. Maryland's all-payer program is one states looked to copy, but with more research the results become more mixed. That's in line with other payment reform models that have not yet been proven effective, suggesting a large learning curve as the value movement proceeds.