Assessment of Costs and Care Quality Associated With Major Surgical Procedures After Implementation of Maryland's Capitated Budget Model

Maryland's Global Budget Revenue Program and Equitable Access to Esophagectomy for Esophageal Cancer

INTRODUCTION

We evaluated equity in access to esophagectomy after Maryland's 2014 "Global Budget Revenue" (GBR) implementation, which equalizes reimbursement rates irrespective of patient insurance and employs an annual hospital revenue ceiling to incentivize reductions in unnecessary resource utilization. We hypothesized that more traditionally underserved patients would undergo surgical treatment for esophageal cancers after GBR.

METHODS

Using Maryland's Health Services Cost Review Commission database, we retrospectively analyzed patient demographics, insurance statuses, inflation-adjusted hospital charges, postoperative outcomes, and discharge dispositions for esophagectomies for neoplasms between 2012 and 2018.

RESULTS

Four hundred eighty six patients were included: 22.0% (107) pre-GBR and 78.0% (379) post-GBR. The proportion of African-American patients increased post-GBR (5.6% versus 12.9%, P = 0.035) and subsequently exhibited year-over-year increases. While not statistically significant, the proportion of Medicaid patients increased from 4.7% to 10.0% (P = 0.085). The post-GBR era also saw patients from 10 new counties, six of which were in Maryland's bottom half of counties ranked by median household income, receive operative esophageal cancer treatment without losing representation from pre-GBR counties. Patient age and sex were comparable between the two groups, and there were no significant differences in mortality or 30-day readmissions. Inflation-adjusted hospital charges and length of hospital stay did not appreciably change post-GBR, including after adjusting for age, comorbidities, and surgical approach.

CONCLUSIONS

GBR increased access to esophagectomy for African-Americans, those insured by Medicaid, and those from lower socioeconomic status counties. Contrary to prior studies of outpatient and emergency room settings, we found the GBR program's goal of reduction of resource utilization and cost were not apparent in this complex surgical population.

Predicting healthcare expenditure based on Adjusted Morbidity Groups to implement a needs-based capitation financing system

BACKGROUND

Due to population aging, healthcare expenditure is projected to increase substantially in developed countries like Spain. However, prior research indicates that health status, not merely age, is a key driver of healthcare costs. This study analyzed data from over 1.25 million residents of Spain's Murcia region to develop a capitation-based healthcare financing model incorporating health status via Adjusted Morbidity Groups (AMGs). The goal was to simulate an equitable area-based healthcare budget allocation reflecting population needs.

METHODS

Using 2017 data on residents' age, sex, AMG designation, and individual healthcare costs, generalized linear models were built to predict healthcare expenditure based on health status indicators. Multiple link functions and distribution families were tested, with model selection guided by information criteria, residual analysis, and goodness-of-fit statistics. The selected model was used to estimate adjusted populations and simulate capitated budgets for the 9 healthcare districts in Murcia.

RESULTS

The gamma distribution with logarithmic link function provided the best model fit. Comparisons of predicted and actual average costs revealed underfunded and overfunded areas within Murcia. If implemented, the capitation model would decrease funding for most districts (up to 15.5%) while increasing it for two high-need areas, emphasizing allocation based on health status and standardized utilization rather than historical spending alone.

CONCLUSIONS

AMG-based capitated budgeting could improve equity in healthcare financing across regions in Spain. By explicitly incorporating multimorbidity burden into allocation formulas, resources can be reallocated towards areas with poorer overall population health. Further policy analysis and adjustment is needed before full-scale implementation of such need-based global budgets.

Is the Centralization of Complex Surgical Procedures an Unintended Spillover Effect of Global Capitation? - Insights from the Maryland Global Budget Revenue Program

OBJECTIVE

To determine if global budget revenue (GBR) models incent the centralization of complex surgical care.

SUMMARY BACKGROUND

In 2014, Maryland initiated a statewide GBR model. While prior research has shown improvements in cost and outcomes for surgical care post-GBR implementation, the mechanism remains unclear.

METHODS

Utilizing state inpatient databases, we compared the proportion of adults undergoing elective complex surgeries (gastrectomy, pneumonectomy/lobectomy, proctectomies, and hip/knee revision) at high-concentration hospitals (HCHs) in Maryland and control states. Annual concentration, per procedure, was defined as hospital volume divided by state volume. HCHs were defined as hospitals with a concentration at least at the 75 th percentile in 2010. We estimated the difference-in-differences (DiD) of the probability of patients undergoing surgery at HCHs before and after GBR implementation.

FINDINGS

Our sample included 122,882 surgeries. Following GBR implementation, all procedures were increasingly performed at HCHs in Maryland. States satisfied the parallel trends assumption for the centralization of gastrectomy and pneumonectomy/lobectomy. Post-GBR, patients were more likely to undergo gastrectomy (DiD: 5.5 p.p., 95% CI [2.2, 8.8]) and pneumonectomy/lobectomy (DiD: 12.4 p.p., 95% CI [10.0, 14.8]) at an HCH in Maryland compared with control states. For our hip/knee revision analyses, we assumed persistent counterfactuals and noted a positive DiD post-GBR implementation (DiD: 4.8 p.p., 95% CI [1.3, 8.2]). No conclusion could be drawn for proctectomy due to different pre-GBR trends.

CONCLUSIONS

GBR implementation is associated with increased centralization for certain complex surgeries. Future research is needed to explore the impact of centralization on patient experience and access.

Implementation of the Maryland Global Budget Revenue Model and Variation in the Expenditures and Outcomes of Surgical Care: A Systematic Review and Meta-analysis

OBJECTIVE

To assess the effect of the Global Budget Revenue (GBR) program on outcomes after surgery.

BACKGROUND

There is limited data summarizing the effect of the GBR program on surgical outcomes as compared with traditional fee-for-service systems.

METHODS

The Medline, Embase, Scopus, and Web of Science databases were used to conduct a systematic literature search on April 5, 2022. We identified full-length reports of comparative studies involving patients who underwent surgery in Maryland after implementation of the GBR program. A random effects model calculated the overall pooled estimate for each outcome which included complications, rates of readmission and mortality, length of stay, and costs.

RESULTS

Fourteen studies were included in the qualitative synthesis, with 8 unique studies included in the meta-analysis. Our analytical sample was comprised of 170,011 Maryland patients, 78,171 patients in the pre-GBR group, and 91,840 patients in the post-GBR group. The pooled analysis identified modest reductions in costs [standardized mean difference (SMD) -0.34; 95% CI, -0.42, -0.25; P <0.001], complications [odds ratio (OR): 0.57; 95% CI, 0.36-0.92, P =0.02], readmission (OR: 0.78; 95% CI, 0.72-0.85, P <0.001), mortality (OR: 0.58; 95% CI, 0.47-0.72, P <0.001), and length of stay (standardized mean difference: -0.26; 95% CI, -0.32, -0.2, P <0.001) after surgery.

CONCLUSIONS

Implementation of the GBR program is associated with improved outcomes and reductions in costs among Maryland patients who underwent surgical procedures. This is particularly salient given the increasing need to disseminate and scale population-based payment models that improve patient care while controlling health care costs.

Trends in Episode-of-Care Spending for Cancer-Directed Surgery Among US Medicare Beneficiaries From 2011 to 2019

This cross-sectional study examines trends in the number of cancer-directed surgeries from 2011 to 2019 among US patients aged 65 years or older and in Medicare spending for those surgeries overall and by inpatient vs outpatient sites of care.

Association of Maryland Global Budget Revenue With Spending and Outcomes Related to Surgical Care for Medicare Beneficiaries With Cancer

Importance

In 2014, Maryland initiated the global budget revenue (GBR) model, placing caps on total hospital expenditures across all care sites. The GBR program aims to reduce unnecessary utilization while maintaining or improving care quality. To date, there has been limited examination of program effects on cancer care.

Objective

To compare changes in spending, clinical outcomes, and acute care utilization through 4 years of the GBR program among Medicare beneficiaries who undergo cancer-directed surgery in Maryland vs matched control states.

Design, Setting, and Participants

Drawing from a matched pool of hospitals in Maryland (n = 35) and 24 control states with a similar timing of Medicaid expansion (n = 101), we identified Medicare beneficiaries from Maryland and control states who underwent any cancer-directed surgery from 2011 through 2018. Using difference-in-differences analysis, we compared changes in outcomes from before (2011-2013) to after (2015-2018) GBR implementation between patients treated in Maryland and control states. We also performed a subgroup analysis among patients who underwent major surgical procedures that are usually performed in the inpatient setting (cystectomy, esophagectomy, gastrectomy, colorectal resection, nephrectomy, pancreatectomy, and lung resection).

Main Outcomes and Measures

Thirty-day episode spending, mortality, readmissions, and emergency department (ED) visits.

Results

Relative to Medicare beneficiaries undergoing cancer surgery in control states (n = 4737; 3323 [70.1%] female; 571 [12.1%] dual-eligible; mean [SD] age 74.9 [6.5] years), patients in Maryland (n = 20 320; 14 068 [69.2%] female; 1705 [8.4%] dual-eligible; mean [SD] age 74.9 [6.5] years) had a statistically significant reduction of 2.2 percentage points (95% CI, -4.3 to -0.1) in the 30-day readmission rate. We found no statistically significant changes in 30-day spending, mortality, or ED visits. We report no significant results in the subgroup analysis of patients undergoing major surgical procedures.

Conclusions and Relevance

Global budget revenue was not associated with changes in expenditures, ED utilization, or clinical outcomes after cancer-directed surgery through 4 years. There was a modest decline in 30-day readmissions. Specialty-specific definitions of care quality and better alignment across the entire care delivery value chain (ie, physician incentives) may be strategies that could improve delivery of high-value care for beneficiaries undergoing cancer surgery.

Evaluation of Length of Stay, Care Volume, In-Hospital Mortality, and Emergency Readmission Rate Associated With Use of Diagnosis-Related Groups for Internal Resource Allocation in Public Hospitals in Hong Kong

Importance

Hong Kong's internal resource allocation system for public inpatient care changed from a global budget system to one based on diagnosis-related groups (DRGs) in 2009 and returned to a global budget system in 2012. Changes in patient and hospital outcomes associated with moving from a DRG-based system to a global budget system for inpatient care have rarely been evaluated.

Objective

To examine associations between the introduction and discontinuation of DRGs and changes in length of stay, volume of care, in-hospital mortality rates, and emergency readmission rates in the inpatient population in acute care hospitals overall, stratified by age group, and across 5 medical conditions.

Design, Setting, and Participants

This cross-sectional study included data from patients aged 45 years or older who were hospitalized in public acute care settings in Hong Kong before the introduction (April 2006 to March 2009), during implementation (April 2009 to March 2012), and after discontinuation (April 2012 to November 2014) of the DRG scheme. Data analysis was conducted from January to June 2021.

Exposures

Public hospitals transitioned from a global budget payment system to a DRG-based system in April 2009 and returned to a global budget system in April 2014.

Main Outcomes and Measures

The main outcome was the association of use of DRGs with patient-level length of stay, in-hospital mortality rate, 1-month emergency readmission rate, and population-level number of admissions per month. An interrupted time series design was used to estimate changes in the level and slope of outcome variables after introduction and discontinuation of DRGs, accounting for pretrends.

Results

This study included 7 604 390 patient episodes. Overall, the mean (SD) age of patients was 68.97 (13.20) years, and 52.17% were male. The introduction of DRGs was associated with a 1.77% (95% CI, 1.23%-2.32%) decrease in the mean length of stay, a 2.90% (95% CI, 2.52%-3.28%) increase in the number of patients admitted, a 4.12% (95% CI, 1.89%-6.35%) reduction in in-hospital mortality, and a 2.37% (95% CI, 1.28%-3.46%) decrease in emergency readmissions. Discontinuation of the DRG scheme was associated with a 0.93% (95% CI, 0.42%-1.44%) increase in the mean length of stay and a 1.82% (95% CI, 1.47%-2.17%) reduction in the number of patients treated after adjusting for covariates; no statistically significant change was observed in in-hospital mortality (-0.14%; 95% CI, -2.29% to 2.01%) or emergency readmission rate (-0.29%; 95% CI, -1.30% to 0.71%).

Conclusions and Relevance

In this cross-sectional study, the introduction of DRGs was associated with shorter lengths of stay and increased hospital volume, and discontinuation was associated with longer lengths of stay and decreased hospital volume. In-hospital mortality and emergency readmission rates did not significantly change after discontinuation of DRGs.