What kinds of impacts do all-payer rate-setting systems have on inpatient and outpatient utilization over time? Maryland’s unique all-payer reimbursement system has long been the subject of speculation and debate, and is the only reimbursement system of its type. Meanwhile, a new study has found relatively minor impacts on inpatient and outpatient utilization in that state, with the researchers concluding that Maryland may not offer a nationwide model to emulate.
An article in Health Services Research, published online on May 8, researchers Nicolae Done, Ph.D., Bradley Herring, Ph.D., and Tim Xu, M.D., entitled “The effects of global budget payments on hospital utilization in rural Maryland,” finds minor impacts on hospital, including rural hospital utilization, including on emergency department (ED) use.
As the authors of the article note, “Maryland implemented global budgets for rural hospitals in 2010 under its Total Patient Revenue (TPR) program and then subsequently implemented global budgets statewide in 2014 under its Global Budget Revenue (GBR) program. These reforms leveraged the state's preexisting unique all‐payer hospital rate‐setting system and the federal government's State Innovation Models (SIM) Initiative. Previous studies have shown little early impact on inpatient readmission rates in TPR's rural hospitals and on either potentially preventable complications or inpatient utilization after GBR's statewide expansion.
Using “data on all inpatient and outpatient discharge abstracts from Maryland hospitals from 2008 to 2013, we estimate the effects of the 2010 reform on several measures of inpatient and outpatient hospital service use,” the authors write.
So, what did their analysis find? “Despite no statistically significant inpatient reductions, our pattern of results is somewhat consistent with an expectation of more discretionary impatient admissions being reduced more than less discretionary admissions,” the researchers write. “Admissions not from the ED had a statistically insignificant decrease of 4.70 percent, while admissions from the ED had a statistically insignificant increase of 1.2 percent. We find no statistically significant differential changes when we analyze admissions based on whether they are deferrable or nondeferrable, preventable or nonpreventable, medical or surgical; and we find no differential changes in 30‐day readmissions.”
That said, “While we generally find no statistically significant effects of TPR on inpatient utilization, we find that TPR had substantial reductions in outpatient utilization, which are robust across alternative model specifications,” they write. “Overall, we find a decrease of roughly 9 percent in outpatient encounters, and this reduction is driven almost entirely by a 15 percent decrease in non‐ED visits, including outpatient clinic visits and outpatient surgeries. Our insignificant inpatient results are inconsistent with the results from a similar global budget experiment implemented in Rochester, NY, between 1980 and 1984, which saw relative reductions of 5‐7 admissions per 1000 residents.” Meanwhile, they note, “The larger effect we observed for outpatient care than for inpatient care is consistent with the observation that the global budget altered financial incentives more for outpatient departments’ prior use of EAPG than for inpatient settings’ prior use of DRGs. Overall, our estimates indicate little to no effect on ED use.”
