Innovative Payment Mechanisms in Maryland Hospitals: An Empirical Analysis of Readmissions under Total Patient Revenue

Early impacts of the Pennsylvania Rural Health Model on potentially avoidable utilization

The Pennsylvania Rural Health Model (PARHM) is a novel alternative payment model for rural hospitals that aims to test whether hospital-based global budgets, coupled with delivery transformation plans, improve the quality of health care and health outcomes in rural communities. Eighteen hospitals joined PARHM in 3 cohorts between 2019 and 2021. This study assessed PARHM's impact on changes in potentially avoidable utilization (PAU)-a measure of admission rates policymakers explicitly targeted for improvement in PARHM. Using a difference-in-differences analysis and all-payer hospital discharge data for Pennsylvania hospitals from 2016 through 2022, we found no significant overall reduction in community-level PAU rates up to 4 years post-PARHM implementation, relative to changes in rural Pennsylvania communities whose hospitals did not join PARHM. However, heterogeneous treatment effects were observed across cohorts that joined PARHM in different years, and between critical access vs prospective payment system hospitals. These findings offer insight into how alternative payment models in rural health care settings may have heterogeneous impacts based on contextual factors and highlight the importance of accounting for these factors in proposed expansions of alternative payment models for rural health systems.

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.

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.

Impact of Global Budget Payments on Cardiovascular Care in Maryland: An Interrupted Time Series Analysis

Background Global budget payments (GBP) are considered effective in containing health care expenditures; however, information on their impact on quality of cardiovascular care is limited. We aimed to evaluate the effects of GBP on utilization, outcomes, and costs for 3 major cardiovascular conditions. Methods We analyzed claims data of hospital admissions in Maryland from fiscal year 2013 to 2018. Using segmented regression, we evaluated temporal trends in hospitalizations, length of stay, percutaneous coronary intervention and coronary artery bypass grafting volumes, case mix-adjusted 30-day readmission rates, risk-standardized mortality rates, and hospitalization charges in patients with principal diagnosis of heart failure, acute ischemic stroke, and acute myocardial infarction (AMI) in relation to GBP implementation. Trends in global cardiovascular procedure charges/volumes were also studied. Results Hospitalization rates for congestive heart failure and AMI remained unaffected by GBP, while the gradient of ischemic stroke admissions decreased (P_trend <0.0001). Length of stay slightly increased for patients with congestive heart failure (P_trend=0.03). Inpatient coronary artery bypass grafting surgeries decreased (P_trend <0.0001). We observed a significant decrease in casemix-adjusted 30-day readmission rate in the AMI cohort beyond the prepolicy trend (P_trend=0.0069). There were no significant changes in mortality for any of the 3 conditions. Hospitalization charges increased for ischemic stroke (P_trend <0.0001), remained constant for congestive heart failure (P_trend=0.1), and decreased for AMI (P_trend=0.0005). We observed a significant increase in electrocardiography rate charges (P_trend <0.0001), coincidentally with a reduction in volumes (P_trend=0.0003). Conclusions Introducing GBP in Maryland had no perceivable adverse effects on inpatient outcomes and quality indicators for 3 major cardiovascular conditions. Savings were observed in the AMI cohort, possibly due to reduced unnecessary readmissions, efficiency improvements, or shifts to outpatient care. Reduced cardiovascular procedure volumes were counterbalanced by a proportional rise in charges. State-level adoption of GBP with pay-for-performance incentives may be effective for cost containment without adversely impacting quality of cardiovascular care.

Impact of Global Budget Revenue Policy on Emergency Department Efficiency in the State of Maryland

INTRODUCTION

On January 1, 2014, the State of Maryland implemented the Global Budget Revenue (GBR) program. We investigate the impact of GBR on length of stay (LOS) for inpatients in emergency departments (ED) in Maryland.

METHODS

We used the Hospital Compare data reports from the Centers for Medicare and Medicaid Services (CMS) and CMS Cost Reports Hospital Form 2552-10 from January 1, 2012-March 31, 2016, with GBR hospitals from Maryland and hospitals from West Virginia (WV), Delaware (DE), and Rhode Island (RI). We implemented difference-in-differences analysis and investigated the impact of GBR implementation on the LOS or ED1b scores of Maryland hospitals using a mixed-effects model with a state-level fixed effect, a hospital-level random effect, and state-level heterogeneity.

RESULTS

The GBR impact estimator was 9.47 (95% confidence interval [CI], 7.06 to 11.87, p-value<0.001) for Maryland GBR hospitals, which implies, on average, that GBR implementation added 9.47 minutes per year to the time that hospital inpatients spent in the ED in the first two years after GBR implementation. The effect of the total number of hospital beds was 0.21 (95% CI, 0.089 to 0.330, p-value = 0 .001), which suggests that the bigger the hospital, the longer the ED1b score. The state-level fixed effects for WV were -106.96 (95% CI, -175.06 to -38.86, p-value = 0.002), for DE it was 6.51 (95% CI, -8.80 to 21.82, p-value=0.405), and for RI it was -54.48 (95% CI, -82.85 to -26.10, p-value<0.001).

CONCLUSION

Our results indicate that GBR implementation has had a statistically significant negative impact on the efficiency measure ED1b of Maryland hospital EDs from January 2014 to April 2016. We also found that the significant state-level fixed effect implies that the same inpatient might experience different ED processing times in each of the four states that we studied.

The effects of global budget payments on hospital utilization in rural Maryland

OBJECTIVE

To assess the effect of Maryland's 2010 Total Patient Revenue (TPR) global budget reform in eight rural hospitals on population-level hospital rates of utilization three years after implementation.

DATA SOURCES/STUDY SETTING

Data on all inpatient discharges and outpatient department visits from the Health Services Cost Review Commission, population data from Claritas Demographic Reports, and county-level data from the Area Health Resource File.

STUDY DESIGN

We use a difference-in-differences approach to compare changes in utilization rates over time in the reform areas comprising 125 Zip Code Tabulation Areas (ZCTAs) and in two control hospital areas (66 ZCTAs and 327 ZCTAs, respectively). We examine several inpatient and outpatient measures and distinguish between relatively discretionary and nondiscretionary utilization.

DATA COLLECTION

Admissions data are hospital-reported discharge abstracts of all encounters in Maryland during 2008-2013. Population data are derived from the US Census.

PRINCIPAL FINDINGS

We find no statistically significant changes in admissions, either overall or discretionary. We find a statistically significant 8.9 percent (95%CI = [1.8, 16.0]) reduction in outpatient visits, with a statistically significant reduction of 14.8 percent (95%CI = [5.3, 24.3]) visits not to the Emergency Department.

CONCLUSIONS

We find that the TPR reform decreased outpatient utilization but did not affect inpatient utilization.

Global budgets in Maryland: early evidence on revenues, expenses, and margins in regulated and unregulated services

Maryland implemented one of the most aggressive payment innovations the nation has seen in several decades when it introduced global budgets in all its acute care hospitals in 2014. Prior to this, a pilot program, total patient revenue (TPR), was established for 8 rural hospitals in 2010. Using financial hospital report data from the Health Services Cost Review Commission from 2007 to 2013, we examined the hospitals' financial results including revenue, costs, and profit/loss margins to explore the impact of the adoption of the TPR pilot global budget program relative to the remaining hospitals in the state. We analyze financial results for both regulated (included in the global budget and subject to rate-setting) and unregulated services in order to capture a holistic image of the hospitals' actual revenue, cost and margin structures. Common size and difference-in-differences analyses of the data suggest that regulated profit ratios for treatment hospitals increased (from 5% in 2007 to 8% in 2013) and regulated expense-to-gross patient revenue ratios decreased (75% in 2007 and 68% in 2013) relative to the controls. Simultaneously, the profit margins for treatment hospitals' unregulated services decreased (- 12% in 2007 and - 17% in 2013), which reduced the overall margin significantly. This analysis therefore indicates cost shifting and less profit gain from the program than identified by solely focusing on the regulated margins.

Local Health Departments' Promotion of Mental Health Care and Reductions in 30-Day All-Cause Readmission Rates in Maryland

BACKGROUND

Individuals affected with mental health conditions, including mood disorders and substance abuse, are at an increased risk of hospital readmission.

OBJECTIVES

The objective of this study is to examine whether local health departments' (LHDs) active roles of promoting mental health are associated with reductions in 30-day all-cause readmission rates, a common quality metric.

METHODS

Using datasets linked from multiple sources, including 2012-2013 State Inpatient Databases for the State of Maryland, the National Association of County and City Health Officials Profiles Survey, the Area Health Resource File, and US Census data, we employed multivariate logistic models to examine whether LHDs' active provision of mental health preventive care, mental health services, and health promotion were associated with the likelihood of having any 30-day all-cause readmission.

RESULTS

Multivariate logistic regressions showed that LHDs' provision of mental health preventive care, mental health services, and health promotion were negatively associated with the likelihoods of having any 30-day readmission for adults 18-64 years old (odds ratios=0.71-0.82, P<0.001), and adults 65 and above (odds ratios=0.61-0.63, P<0.001, preventive care and services, respectively). These estimated associations were more prominent among individuals with mental illness and/or substance use disorders, African Americans, Medicare, and Medicaid enrollees.

CONCLUSIONS

Our results suggest that LHDs in Maryland that engage in mental health prevention, promotion, and coordination activities are associated with benefits for residents and for the health care system at large. Additional research is needed to evaluate LHD activities in other states to determine if these results are generalizable.

Changes In Hospital Utilization Three Years Into Maryland's Global Budget Program For Rural Hospitals

In a substantial shift in payment policy, the State of Maryland implemented a global budget program for acute care hospitals in 2010. Goals of the program include controlling hospital use and spending. Eight rural hospitals entered the program in 2010, while urban and suburban hospitals joined in 2014. Prior analyses, which focused on urban and suburban hospitals, did not find consistent evidence that Maryland's program had contributed to changes in hospital use after two years. However, these studies were limited by short follow-up periods, may have failed to isolate impacts of Maryland's payment change from other state trends, and had limited generalizability to rural settings. To understand the effects of Maryland's global budget program on rural hospitals, we compared changes in hospital use among Medicare beneficiaries served by affected rural hospitals versus an in-state control population from before to after 2010. By 2013-three years after the rural program began-there were no differential changes in acute hospital use or price-standardized hospital spending among beneficiaries served by the affected hospitals, versus the within-state control group. Our results suggest that among Medicare beneficiaries, global budgets in rural Maryland hospitals did not reduce hospital use or price-standardized spending as policy makers had anticipated.

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

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.