Global Budgets Transformed Hospitals and Reduced Spending in Maryland
This featured finding describes research examining the impact of Maryland’s hospital global budget model on spending, utilization, hospital operations and hospital financial performance.
Hospital global budgets—annual targets for hospital revenue from inpatient and outpatient services—recently have emerged as a policy option for controlling U.S. health care costs. The Maryland All-Payer Model (MDAPM), established in 2014 as a model test by the Centers for Medicare & Medicaid Services’ Innovation Center, is the most prominent global budget initiative in the U.S.
AcademyHealth member Susan Haber, ScD, and colleagues from RTI International evaluated the model and found hospital savings for Medicare beneficiaries and commercial plan members as well as fewer Medicare inpatient stays, but did not find strong evidence for savings in total spending. The MDAPM had the greatest impact on outcomes that are directly under hospitals’ control but outcomes that require collaboration with other providers in the community such as emergency department visits, readmissions, and follow-up visits after hospital discharge, generally did not improve.
For additional information, please see the final report of the Maryland All-Payer Model.