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

Free Flap Reconstruction in the Era of Commercial Price Transparency: What Are We Paying For?

BACKGROUND

Commercial rates for free flap reconstruction were not known publicly before the 2021 Hospital Price Transparency Final Rule. The purpose of this study was to examine commercial facility payments to characterize nationwide variation for microsurgical operations and identify opportunities to improve market effectiveness.

METHODS

A cross-sectional study was performed using 2022 commercial insurance pricing merged with hospital performance data. Facility payment rates were extracted for nine CPT codes for free flap operations. Price variation was quantified by means of across-hospital ratios and within-hospital ratios. Mixed effects linear models evaluated commercial rates relative to value, outcomes, and equity performance metrics, in addition to facility-level factors that included health care market concentration.

RESULTS

A total of 20,528 commercial rates across 675 hospitals were compiled. Across-hospital ratios ranged from 5.85 to 7.95, whereas within-hospital ratios ranged from 1.00 to 1.71. Compared with the lowest scoring hospitals (grade D), hospitals with an outcome grade of A and equity grades of B or C were associated with higher commercial rates ( P < 0.04); there were no significant differences in rate based on value. Higher commercial rates were also associated with nonprofit status and more concentrated markets ( P < 0.006). Lower commercial rates were correlated with safety-net and teaching hospitals ( P < 0.001).

CONCLUSIONS

Commercial rates for free flaps varied substantially both across and within hospitals. Associations of higher commercial rates with less competitive markets, and the lack of consistent association with value and equity, identify market failures. Additional work is needed to improve market efficiency for free flap operations.

Negotiated Rates for Surgical Cancer Care in the Era of Price Transparency-Prices Reflect Market Competition

OBJECTIVE

To measure commercial price variation for cancer surgery within and across hospitals.

BACKGROUND

Surgical care for solid-organ tumors is costly, and negotiated commercial rates have been hidden from public view. The Hospital Price Transparency Rule, enacted in 2021, requires all hospitals to list their negotiated rates on their website, thus opening the door for an examination of pricing for cancer surgery.

METHODS

This was a cross-sectional study using 2021 negotiated price data disclosed by US hospitals for the 10 most common cancers treated with surgery. Price variation was measured using within-hospital and across-hospital ratios. Commercial rates relative to cancer center designation and the Herfindahl-Hirschman Index at the facility level were evaluated with mixed effects linear regression with random intercepts per procedural code.

RESULTS

In all, 495,200 unique commercial rates from 2232 hospitals resulted for the 10 most common solid-organ tumor cancers. Gynecologic cancer operations had the highest median rates at $6035.8/operation compared with bladder cancer surgery at $3431.0/operation. Compared with competitive markets, moderately and highly concentrated markets were associated with significantly higher rates (HHI 1501, 2500, coefficient $513.6, 95% CI, $295.5, $731.7; HHI >2500, coefficient $1115.5, 95% CI, $913.7, $1317.2). National Cancer Institute designation was associated with higher rates, coefficient $3,451.9 (95% CI, $2853.2, $4050.7).

CONCLUSIONS

Commercial payer-negotiated prices for the surgical management of 10 common, solid tumor malignancies varied widely both within and across hospitals. Higher rates were observed in less competitive markets. Future efforts should facilitate price competition and limit health market concentration.

The end of an era? Activity-based funding based on diagnosis-related groups: A review of payment reforms in the inpatient sector in 10 high-income countries

CONTEXT

Across the member countries of the Organisation for Economic Co-Operation and Development, policy makers are searching for new ways to pay hospitals for inpatient care to move from volume to value. This paper offers an overview of the latest reforms and their evidence to date.

METHODS

We reviewed reforms to DRG payment systems in 10 high-income countries: Australia, Austria, Canada (Ontario), Denmark, France, Germany, Norway, Poland, the United Kingdom (England), and the United States.

FINDINGS

We identified four reform trends among the observed countries, them being (1) reductions in the overall share of inpatient payments based on DRGs, (2) add-on payments for rural hospitals or their exclusion from the DRG system, (3) episode-based payments, which use one joint price to pay providers for all services delivered along a patient pathway, and (4) financial incentives to shift the delivery of care to less costly settings. Some countries have combined some or all of these measures with financial adjustments for quality of care. These reforms demonstrate a shift away from activity and efficiency towards a diversified set of targets, and mirror efforts to slow the rise in health expenditures while improving quality of care. Where evaluations are available, the evidence indicates mixed success in improving quality of care and reducing costs and expenditures.

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.

Twenty-five years of the Medicare Rural Hospital Flexibility Program: The past as prologue

PURPOSE

The Medicare Rural Hospital Flexibility (Flex) Program and the Critical Access Hospital (CAH) provider type are now 25 years old. Since the inception of the program, the needs of CAHs have evolved greatly. This article describes the history of the limited-service hospital model that led to the creation of CAHs, the evolution and impact of the Flex Program on CAHs, and the trends likely to impact CAHs and rural healthcare in the future. It concludes with recommendations to address these future needs.

METHODS

This review of the 25-year history of the Flex Program and CAHs is based on a detailed analysis of the literature on the limited-service hospital model and CAHs, the evaluation reports of the Flex Tracking and Flex Monitoring Teams, and the author's 25-year history with the program.

FINDINGS

The Flex Program has made important contributions to the viability of rural hospitals through the conversion of 1,360 CAHs. The program has encouraged attention on CAH quality of care and the role of CAHs in addressing the population health needs of their communities. It has further encouraged the development of a robust rural health policy and advocacy infrastructure that has heightened attention on the needs of rural providers and communities.

CONCLUSIONS

The needs of CAHs and rural delivery systems have evolved greatly since the implementation of the Flex Program. The 25th anniversary of the program is an ideal time to re-evaluate and update the program to support CAHs in adapting to the fast-changing healthcare environment.

The impact of a statewide payment reform on transcatheter aortic valve replacement (TAVR) utilization and readmissions

BACKGROUND

Transcatheter aortic valve replacement (TAVR) is an increasingly used but relatively expensive procedure with substantial associated readmission rates. It is unknown how cost-constrictive payment reform measures, such as Maryland's All Payer Model, impact TAVR utilization given its relative expense. This study investigated the impact of Maryland's All Payer Model on TAVR utilization and readmissions among Maryland Medicare beneficiaries.

METHODS

This was a quasi-experimental investigation of Maryland Medicare patients undergoing TAVR between 2012 and 2018. New Jersey data were used for comparison. Longitudinal interrupted time series analyses were used to study TAVR utilization and difference-in-differences analyses were used to investigate post-TAVR readmissions.

RESULTS

During the first year of payment reform (2014), TAVR utilization among Maryland Medicare beneficiaries dropped by 8% (95% confidence interval [CI]: -9.2% to -7.1%; p < 0.001), with no concomitant change in TAVR utilization in New Jersey (0.2%, 95% CI: 0%-1%, p = 0.09). Longitudinally, however, the All Payer Model did not impact TAVR utilization in Maryland compared to New Jersey. Difference-in-differences analyses demonstrated that implementation of the All Payer Model was not associated with significantly greater declines in 30-day post-TAVR readmissions in Maryland versus New Jersey (-2.1%; 95% CI: -5.2% to 0.9%; p =0.1).

CONCLUSIONS

Maryland's All Payer Model resulted in an immediate decline in TAVR utilization, likely a result of hospitals adjusting to global budgeting. However, beyond this transition period, this cost-constrictive reform measure did not limit Maryland TAVR utilization. In addition, the All Payer Model did not reduce post-TAVR 30-day readmissions. These findings may help inform expansion of globally budgeted healthcare payment structures.

Do budget constraints limit access to health care? Evidence from PCI treatments in Hungary

Under Hungary's single payer health care system, hospitals face an annual budget cap on most of their diagnoses-related group based reimbursements. In July 2012, percutaneous coronary intervention (PCI) treatments of acute myocardial infarction were exempted from that hospital level budget cap. We use countrywide individual-level patient data from 2009 to 2015 to map the effect of such a quasi-experimental change in monetary incentives on health provider decisions and health outcomes. We find that direct admissions into PCI-capable hospitals increase, especially in central Hungary, where there are several hospitals which can compete for patients. The proportion of PCI treatments at PCI-capable hospitals, however, does not increase, and neither does the number of patient transfers from non-PCI hospitals to PCI-capable ones. We conclude that only patient pathways, plausibly influenced by hospital management, were affected by the shift in incentives, while physicians' treatment decisions were not. While average length of stay decreased, we do not find any effect on 30-day readmissions or in-hospital mortality.

China Promotes Sanming's Model: A National Template for Integrated Medicare Payment Methods

Introduction

China is promoting integrated care. However, incomplete payment methods led to medical insurance overspending and intensified service fragmentation. Sanming implemented Integrated Medicare Payment Methods (IMPM) in October 2017, which integrates multi-level payment policies. Sanming's IMPM works well and has been promoted by the Chinese government. Therefore, in this paper, we aim to systematically analyze Sanming's IMPM, and conduct preliminary evaluations of Sanming's IMPM.

Policy Description

IMPM integrates two levels of policy that are implemented simultaneously: (1) The payment policy for healthcare providers refers to how to calculate the global budget (GB) of the medical insurance fund paid to the healthcare providers and the policy guidance for the healthcare providers on how to use GB. (2) The payment policy for medical personnel refers to the adjustment of the evaluation index of the annual salary system (ASS) according to the IMPM's purpose and the payment policy that adjust pay levels based on performance.

Discussion and lessons learned

After the IMPM reform, county hospitals (CHs) may reduce over-providing dispensable healthcare, and cooperation between hospitals may increase. The policy guidance (Determining GB according to population; Medical insurance balance can be used for doctors' salary, cooperation between hospitals, and promotion of residents' health; Adjusting ASS assessment indicators according to IMPM purposes) increases CHs' motivation to promote balances of medical insurance fund by cooperating with primary healthcare and increasing health promotion actions.

Conclusion

As a model promoted by the Chinese government, the specific policies of Sanming's IMPM are better matched with policy goals, which may be more conducive to promoting medical and health service providers to pay more attention to cooperation among medical institutions and population health.

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.

Commercial Price Variation for Breast Reconstruction in the Era of Price Transparency

Importance

Breast reconstruction is costly, and negotiated commercial rates have been hidden from public view. The Hospital Price Transparency Rule was enacted in 2021 to facilitate market competition and lower health care costs. Breast reconstruction pricing should be analyzed to evaluate for market effectiveness and opportunities to lower the cost of health care.

Objective

To evaluate the extent of commercial price variation for breast reconstruction. The secondary objective was to characterize the price of breast reconstruction in relation to market concentration and payer mix.

Design, Setting, and Participants

This was a cross-sectional study conducted from January to April 2022 using 2021 pricing data made available after the Hospital Price Transparency Rule. National data were obtained from Turquoise Health, a data service platform that aggregates price disclosures from hospital websites. Participants were included from all hospitals with disclosed pricing data for breast reconstructive procedures, identified by Current Procedural Terminology (CPT) code.

Main Outcomes and Measures

Price variation was measured via within- and across-hospital ratios. A mixed-effects linear model evaluated commercial rates relative to governmental rates and the Herfindahl-Hirschman Index (health care market concentration) at the facility level. Linear regression was used to evaluate commercial rates as a function of facility characteristics.

Results

A total of 69 834 unique commercial rates were extracted from 978 facilities across 335 metropolitan areas. Commercial rates increased as health care markets became less competitive (coefficient, $4037.52; 95% CI, $700.12 to $7374.92; P = .02; for Herfindahl-Hirschman Index [HHI] 1501-2500, coefficient $3290.21; 95% CI, $878.08 to $5702.34; P = .01; both compared with HHI ≤1500). Commercial rates demonstrated economically insignificant associations with Medicare and Medicaid rates (Medicare coefficient, -$0.05; 95% CI, -$0.14 to $0.03; P = .23; Medicaid coefficient, $0.14; 95% CI, $0.07 to $0.22; P < .001). Safety-net and nonprofit hospitals reported lower commercial rates (coefficient, -$3269.58; 95% CI, -$3815.42 to -$2723.74; P < .001 and coefficient, -$1892.79; -$2519.61 to -$1265.97; P < .001, respectively). Extra-large hospitals (400+ beds) reported higher commercial rates compared with their smaller counterparts (coefficient, $1036.07; 95% CI, $198.29 to $1873.85, P = .02).

Conclusions and Relevance

Study results suggest that commercial rates for breast reconstruction demonstrated large nationwide variation. Higher commercial rates were associated with less competitive markets and facilities that were large, for-profit, and nonsafety net. Privately insured patients with breast cancer may experience higher premiums and deductibles as US hospital market consolidation and for-profit hospitals continue to grow. Transparency policies should be continued along with actions that facilitate greater health care market competition. There was no evidence that facilities increase commercial rates in response to lower governmental rates.

The Response of Different-Levels Public Hospitals to Regional Global Budget with a Floating Payment System: Evidence from China

BACKGROUND

Regional Global Budget with a Floating Payment System (RGB-FPS) is a global budget widely used in medical insurance payments. However, existing studies on hospitals' responses to RGB-FPS have limitations. First, existing studies have paid little attention to RGB-FPS's macro effects. Theoretical studies did not analyze differences between different levels of hospitals. Secondly, studies did not reveal whether RGB-FPS has the same impact on the public-hospital-dominated market.

METHODS

First, we refine the research hypotheses through theoretical analysis. We then test the hypotheses empirically through interrupted time series analysis.

RESULTS

Theoretical analysis found that small hospitals were easier to transfer costs. The empirical analysis found that after RGB-FPS, the proportion of inpatients (PI)and the average times of inpatients in large hospitals increased (p < 0.001), and the proportion of non-reimbursable expenses (PNE) remained stable (p > 0.05). PI in secondary hospitals decreased (p < 0.01), and PNE increased (p < 0.01). PI in the primary hospital decreased (p < 0.05), and PNE increased (p < 0.001).

CONCLUSION

This study verifies theoretically and empirically that large hospitals are easier to increase service volume and small hospitals are easier to transfer costs under the influence of RGB-FPS. Chinese public hospitals' response to RGB-FPS is similar to that of private hospitals.

Factors Associated with Compliance to the Hospital Price Transparency Final Rule: a National Landscape Study

BACKGROUND

The Hospital Price Transparency Final Rule, effective January 1, 2021, requires hospitals to post online a machine-readable file that includes payer-specific negotiated commercial prices for all services. The regulation aims to improve the affordability of hospital care by promoting price competition. However, a low compliance level among hospitals would compromise the operational effectiveness of this regulation. Understanding hospitals' compliance status to the regulation has important implications for its enforcement effort and effectiveness assessment.

OBJECTIVE

To analyze nationwide hospitals' compliance status to the Hospital Price Transparency Rule.

DESIGN

Cross-sectional observational study.

PARTICIPANTS

A total of 3558 Medicare-certified general acute-care hospitals were examined.

MAIN MEASURES

A binary compliance rating was generated by using data collected by Turquoise Health. "Noncompliance" means that no machine-readable file was posted or the posted file contains no commercial negotiated prices. "Compliance" means that a machine-readable file was posted with commercial negotiated prices for at least one insurance plan.

KEY RESULTS

As of June 1, 2021, 55% of the 3558 Medicare-certified general acute-care hospitals we examined had not posted a machine-readable file containing commercial negotiated prices. Wide variations of compliance existed across states and hospital referral regions. A hospital's compliance status is strongly associated with the average compliance status of peer hospitals in the same market. Hospitals with greater IT preparedness, for-profit hospitals, system-affiliated hospitals, large hospitals, and non-urban hospitals had greater compliance. More concentrated hospital markets had greater average compliance.

CONCLUSIONS

Hospitals take into consideration the behavior of their peers in the same market when making price disclosure decisions. Compliant hospitals are likely to have better IT preparedness, more financial resources and personnel expertise to mitigate the cost required for the implementation of the Price Transparency Rule. The compliance cost, therefore, might be a barrier for some hospitals.

Varied Health Spending Growth Across US States Was Associated With Incomes, Price Levels, And Medicaid Expansion, 2000-19

Little is known about health care spending variation across the US for recent years. To estimate health spending by state and payer, we combined data from the government's State Health Expenditure Accounts, which have estimates through 2014, with other primary data on spending. In 2019 state-specific per person spending ranged from $7,250 to $14,500. After adjustment for inflation, annualized per person spending growth for each state ranged from 1.0 percent in Washington, D.C., to 4.2 percent in South Dakota between 2013 and 2019. The factors that explained the most variation across states were incomes (25.3 percent) and consumer prices (21.7 percent). Medicaid expansion was associated with increases in total spending per person, although the median of spending in expansion states showed slower growth in out-of-pocket spending than the median in nonexpansion states. Contemporary estimates of state health spending are valuable for tracking divergent expenditure trajectories in the US and assessing the associated factors.

Hospital-Administered Cancer Therapy Prices for Patients With Private Health Insurance

Importance

The federal Hospital Price Transparency final rule, which became effective in 2021, requires hospitals to publicly disclose payer-specific prices for drugs. However, little is known about hospital markup prices for parenterally administered therapies.

Objective

To assess the extent of price markup by hospitals on parenterally administered cancer therapies and price variation among hospitals and between payers at each hospital.

Design, Setting, and Participants

A cross-sectional analysis was conducted of private payer-specific negotiated prices for the top 25 parenteral (eg, injectable or infusible) cancer therapies by Medicare Part B spending in 2019 using publicly available hospital price transparency files. Sixty-one National Cancer Institute (NCI)-designated cancer centers providing clinical care to adults with cancer were included. The study was conducted from April 1 to October 15, 2021.

Exposures

Estimated hospital acquisition costs for each cancer therapy using participation data from the federal 340B Drug Pricing Program.

Main Outcomes and Measures

The primary outcome was hospital price markup for each cancer therapy in excess of estimated acquisition costs. Secondary outcomes were the extent of across-center price ratios, defined as the ratio between the 90th percentile and 10th percentile median prices across centers, and within-center price ratios, defined as the ratio between the 90th percentile and 10th percentile prices between payers at each center.

Results

Of 61 NCI-designated cancer centers, 27 (44.3%) disclosed private payer-specific prices for at least 1 top-selling cancer therapy as required by federal regulations. Median drug price markups across all centers and payers ranged between 118.4% (sipuleucel-T) and 633.6% (leuprolide). Across-center price ratios ranged between 2.2 (pertuzumab) and 15.8 (leuprolide). Negotiated prices also varied considerably between payers at the same center; median within-center price ratios for cancer therapies ranged from 1.8 (brentuximab) to 2.5 (bevacizumab).

Conclusions and Relevance

Most NCI-designated cancer centers did not publicly disclose payer-specific prices for cancer therapies as required by federal regulation. The findings of this cross-sectional study suggest that, to reduce the financial burden of cancer treatment for patients, institution of public policies to discourage or prevent excessive hospital price markups on parenteral chemotherapeutics might be beneficial.

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.

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.

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

IMPORTANCE

In 2014, Maryland implemented the all-payer model, a distinct hospital funding policy that applied caps on annual hospital expenditures and mandated reductions in avoidable complications. Expansion of this model to other states is currently being considered; therefore, it is important to evaluate whether Maryland's all-payer model is achieving the desired goals among surgical patients, who are an at-risk population for most potentially preventable complications.

OBJECTIVE

To examine the association between the implementation of Maryland's all-payer model and the incidence of avoidable complications and resource use among adult surgical patients.

DESIGN, SETTING, AND PARTICIPANTS

This comparative effectiveness study used hospital discharge records from the Healthcare Cost and Utilization Project state inpatient databases to conduct a difference-in-differences analysis comparing the incidence of avoidable complications and the intensity of health resource use before and after implementation of the all-payer model in Maryland. The analytical sample included 2 983 411 adult patients who received coronary artery bypass grafting (CABG), carotid endarterectomy (CEA), spinal fusion, hip or knee arthroplasty, hysterectomy, or cesarean delivery between January 1, 2008, and December 31, 2016, at acute care hospitals in Maryland (intervention state) and New York, New Jersey, and Rhode Island (control states). Data analysis was conducted from July 2019 to July 2021.

EXPOSURES

All-payer model.

MAIN OUTCOMES AND MEASURES

Complications (infectious, cardiovascular, respiratory, kidney, coagulation, and wound) and health resource use (ie, hospital charges).

RESULTS

Of 2 983 411 total patients in the analytical sample, 525 262 patients were from Maryland and 2 458 149 were from control states. Across Maryland and the control states, there were statistically significant but not clinically relevant differences in the preintervention period with regard to patient age (mean [SD], 49.7 [19.0] years vs 48.9 [19.3] years, respectively; P < .001), sex (22.7% male vs 21.4% male; P < .001), and race (0.3% vs 0.4% American Indian, 2.8% vs 4.5% Asian or Pacific Islander, 25.9% vs 12.7% Black, 4.7% vs 11.9% Hispanic, and 63.5% vs 63.4% White; P < .001). After implementation of the all-payer model in Maryland, significantly lower rates of avoidable complications were found among patients who underwent CABG (-11.3%; 95% CI, -13.8% to -8.7%; P < .001), CEA (-1.6%; 95% CI, -2.9% to -0.3%; P = .02), hip arthroplasty (-0.8%; 95% CI, -1.0% to -0.5%; P < .001), knee arthroplasty (-0.4%; 95% CI, -0.7% to -0.1%; P = .01), and cesarean delivery (-1.0%; 95% CI, -1.3% to -0.7%; P < .001). In addition, there were significantly lower increases in index hospital costs in Maryland among patients who underwent CABG (-$6236; 95% CI, -$7320 to -$5151; P < .001), CEA (-$730; 95% CI, -$1367 to -$94; P = .03), spinal fusion (-$3253; 95% CI, -$3879 to -$2627; P < .001), hip arthroplasty (-$328; 95% CI, -$634 to -$21; P = .04), knee arthroplasty (-$415; 95% CI, -$643 to -$187; P < .001), cesarean delivery (-$300; 95% CI, -$380 to -$220; P < .001), and hysterectomy (-$745; 95% CI, -$974 to -$517; P < .001). Significant changes in patient mix consistent with a younger population (eg, a shift toward private/commercial insurance for orthopedic procedures, such as spinal fusion [4.3%; 95% CI, 3.4%-5.2%; P < .001] and knee arthroplasty [1.6%; 95% CI, 1.0%-2.3%; P < .001]) and a lower comorbidity burden across surgical procedures (eg, CABG: -0.7% [95% CI, -0.1% to -0.5%; P < .001]; hip arthroplasty: -3.0% [95% CI, -3.6% to -2.3%; P < .001]) were also observed.

CONCLUSIONS AND RELEVANCE

In this study, patients who underwent common surgical procedures had significantly fewer avoidable complications and lower hospital costs, as measured against the rate of increase throughout the study, after implementation of the all-payer model in Maryland. These findings may be associated with changes in the patient mix.

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.

Trends in Low-Value Health Service Use and Spending in the US Medicare Fee-for-Service Program, 2014-2018

IMPORTANCE

Low-value care, defined as care offering no net benefit in specific clinical scenarios, is associated with harmful outcomes in patients and wasteful spending. Despite a national education campaign and increasing attention on reducing health care waste, recent trends in low-value care delivery remain unknown.

OBJECTIVE

To assess national trends in low-value care use and spending.

DESIGN, SETTING, AND PARTICIPANTS

In this cross-sectional study, analyses of low-value care use and spending from 2014 to 2018 were conducted using 100% Medicare fee-for-service enrollment and claims data. Included individuals were aged 65 years or older and continuously enrolled in Medicare parts A, B, and D during each measurement year and the previous year. Data were analyzed from September 2019 through December 2020.

EXPOSURE

Being enrolled in fee-for-service Medicare for a period of time, in years.

MAIN OUTCOMES AND MEASURES

The Milliman MedInsight Health Waste Calculator was used to assess 32 claims-based measures of low-value care associated with Choosing Wisely recommendations and other professional guidelines. The calculator designates services as wasteful, likely wasteful, or not wasteful based on an absence of indication of appropriate use in the claims history; calculator-designated wasteful services were defined as low-value care. Spending was calculated as claim-line level (ie, spending on the low-value service) and claim level (ie, spending on the low-value service plus associated services), adjusting for inflation.

RESULTS

Among 21 045 759 individuals with fee-for-service Medicare (mean [SD] age, 77.4 [7.9] years; 12 515 915 [59.5%] women), the percentage receiving any of 32 low-value services decreased from 36.3% (95% CI, 36.3%-36.4%) to 33.6% (95% CI, 33.6%-33.6%) from 2014 to 2018. Uses of low-value services per 1000 individuals decreased from 677.8 (95% CI, 676.2-679.5) to 632.7 (95% CI, 632.6-632.8) from 2014 to 2018. Three services comprised approximately two-thirds of uses among 32 low-value services per 1000 individuals: preoperative laboratory testing decreased from 213.8 (95% CI, 213.4-214.2) to 166.2 (95% CI, 166.2-166.2), while opioids for back pain increased from 154.4 (95% CI, 153.6-155.2) to 182.1 (95% CI, 182.1-182.1) and antibiotics for upper respiratory infections increased from 75.0 (95% CI, 75.0-75.1) to 82 (95% CI, 82.0-82.0). Spending per 1000 individuals on low-value care also decreased, from $52 765.5 (95% CI, $51 952.3-$53 578.6) to $46 921.7 (95% CI, $46 593.7-$47 249.7) at the claim-line level and from $160 070.4 (95% CI, $158 999.8-$161 141.0) to $144 741.1 (95% CI, $144 287.5-$145 194.7) at the claim level.

CONCLUSIONS AND RELEVANCE

This cross-sectional study found that among individuals with fee-for-service Medicare receiving any of 32 measured services, low-value care use and spending decreased marginally from 2014 to 2018, despite a national education campaign in collaboration with clinician specialty societies and increased attention on low-value care. While most use of low-value care came from 3 services, 1 of these was opioid prescriptions, which increased over time despite the harms associated with their use. These findings may represent several opportunities to prevent patient harm and lower spending.

The impact of Maryland's payment reforms on hospital community benefit efforts

BACKGROUND

In 2014, Maryland established a global budget policy for all hospitals in the state. Under this policy, hospitals are incentivized to not only provide clinical care services to individual patients but also address the health needs of their broader patient population through prevention efforts and investment in the upstream social and economic factors that determine health.

PURPOSE

To better understand the incentives created for hospitals under this policy, our study assessed whether the implementation of global budgets changed the levels and patterns of Maryland hospitals' investments in community benefits.

APPROACH

Data on hospital community benefit spending from the Internal Revenue Service Form 990 Schedule H for the years 2010-2016 were utilized for this study.

RESULTS

We found that Maryland hospitals' total spending on community benefits decreased under the global budget policy. Unlike hospitals in similar states without a global budget policy, Maryland hospitals did not experience any increases in Medicaid shortfalls between 2014 and 2016. Although Maryland hospitals provided more subsidized health services, their investment in broader community health improvement activities remained unchanged.

CONCLUSION

Our analysis suggests that Maryland hospitals have shifted strategies because of the implementation of the global budget policy. The ability to report community benefit in a way that accurately considers the context and constraints of a state's policies would provide hospitals better means of communicating these efforts to stakeholders.

PRACTICE IMPLICATIONS

Our results suggest that global budgets impact the levels and patterns of hospitals' community benefit investments.

Structural Urbanism Contributes To Poorer Health Outcomes For Rural America

Rural populations disproportionately suffer from adverse health outcomes, including poorer health and higher age-adjusted mortality. We argue that these disparities are due in part to declining health care provider availability and accessibility in rural communities. Rural challenges are exacerbated by "structural urbanism"-elements of the current public health and health care systems that disadvantage rural communities. We suggest that biases in current models of health care funding, which treat health care as a service for an individual rather than as infrastructure for a population, are innately biased in favor of large populations. Until this bias is recognized, the development of viable models for care across the rural-urban continuum cannot move forward.

Maryland's Global Budget Revenue model associated with lower inpatient costs and 30-day readmissions in patients undergoing total hip arthroplasty

BACKGROUND

Maryland implemented the Global Budget Revenue (GBR) to reduce hospital costs, improve quality, and decrease readmissions. Studies assessing its impact on inpatient total hip arthroplasty (THA) procedures are lacking. This study compared before and after GBR changes in 1) patient characteristics; 2) discharge dispositions and lengths of stay (LOS); 3) costs and charges of inpatient stays; and 4) 30-day readmission rates (RR) for THA recipients.

METHODS

The Maryland State Inpatient Database was queried for patients who underwent THA between 2010 and 2016 utilizing the ICD-9 and ICD-10 procedure codes (n = 43,251). Pre- and post-GBR periods were grouped as 2010 to 2013 and 2014 to 2016, respectively. Chi-square analyses were used to analyze patient characteristics. Student's t-tests were utilized to compare ages, LOS, costs, charges, and RR.

RESULTS

There were no differences in the proportion of minorities undergoing THA between the pre- and post-GBR periods (18.3% vs 19.4% African American, 1.2% vs 1.3% Hispanic; P = .056). The number of THA patients with Medicaid insurances increased during post-GBR (4.0% vs 6.7%; P < .001). There was an increased rate of home discharges during post-GBR (33.1% vs 40.9%; P < .001). We found lower LOS (-0.50 days; 95% CI: -0.458 to -0.533; P < .001), mean inpatient costs (-$1417.44; 95% CI -$1143.76 to -$1150.32; P < .001), and mean inpatient charges (-$2196.50; 95% CI: -$1980.10 to -$2412.90; P < .001) during the post-GBR period. There were lower 30-day RR during the post-GBR period (-0.9%; P < .001).

CONCLUSIONS

Our findings suggest favorable preliminary results for patients undergoing THA under the GBR model.

Global budget versus cost ceiling: a natural experiment in hospital payment reform in the Netherlands

Global budget (GB) arrangements have become a popular method worldwide to control the rise in healthcare expenditures. By guaranteeing hospital funding, payers hope to eliminate the drive for increased production, and incentivize providers to deliver more efficient care and lower utilization. We evaluated the introduction of GB contracts by certain large insurers in Dutch hospital care in 2012 and compared health care utilization to those insurers who continued with more traditional production-based contracts, i.e., cost ceiling (CC) contracts. We used the share of GB hospital funding per postal code region to study the effect of contract types. Our findings show that having higher share of GB financing was associated with lower growth in treatment intensity, but it was also associated with higher growth in the probability of having at least one hospital visit. While the former finding is in line with our expectation, the latter is not and suggests that hospital visits may take longer to respond to contract incentives. Our study covers the years of 2010-2013 (2 years before and 2 years following the introduction of the new contracts). Therefore, our results capture only short-term effects.

Influence of the Maryland All-Payer Model on Primary Total Knee Arthroplasties

In 2014, Maryland received a waiver for the Global Budget Revenue (GBR) program. We evaluated GBR's impact on patient and hospital trends for total knee arthroplasty (TKA) in Maryland compared with the U.S. Specifically, we examined (1) patient characteristics, (2) inpatient course, and (3) costs and charges associated with TKAs from 2014 through 2016.

METHODS

A comparative analysis of TKA-treated patients in the Maryland State Inpatient Database (n = 36,985) versus those in the National Inpatient Sample (n = 2,117,191) was performed. Patient characteristics included race, Charlson Comorbidity Index (CCI), morbid obesity, patient income status, and primary payer. Inpatient course included length of hospital stay (LOS), discharge disposition, and complications.

RESULTS

In the Maryland TKA cohort, the proportion of minorities increased from 2014 to 2016 while the proportion of whites decreased (p = 0.001). The proportion of patients with a CCI of ≥3 decreased (p = 0.014), that of low-income patients increased (p < 0.001), and that of patients covered by Medicare or Medicaid increased (p < 0.001). In the U.S. TKA cohort, the proportion of blacks increased (p < 0.001), that of patients with a CCI score of ≥3 decreased (p < 0.001), and the proportions of low-income patients (p < 0.001) and those covered by Medicare or Medicaid increased (p < 0.001). In both Maryland and the U.S., the LOS (p < 0.001) and complication rate (p < 0.001) decreased while home-routine discharges increased (p < 0.001). Costs and charges decreased in Maryland (p < 0.001 for both) whereas charges in the U.S. increased (p < 0.001) and costs decreased (p < 0.001).

CONCLUSIONS

While the U.S. health reform and GBR achieved similar patient and hospital-specific outcomes and broader inclusion of minority patients, Maryland experienced decreased hospital charges while hospital charges increased in the U.S.

LEVEL OF EVIDENCE

Economic Level IV. See Instructions for Authors for a complete description of levels of evidence.

Health Care Spending, Utilization, and Quality 8 Years into Global Payment

BACKGROUND

Population-based global payment gives health care providers a spending target for the care of a defined group of patients. We examined changes in spending, utilization, and quality through 8 years of the Alternative Quality Contract (AQC) of Blue Cross Blue Shield (BCBS) of Massachusetts, a population-based payment model that includes financial rewards and penalties (two-sided risk).

METHODS

Using a difference-in-differences method to analyze data from 2006 through 2016, we compared spending among enrollees whose physician organizations entered the AQC starting in 2009 with spending among privately insured enrollees in control states. We examined quantities of sentinel services using an analogous approach. We then compared process and outcome quality measures with averages in New England and the United States.

RESULTS

During the 8-year post-intervention period from 2009 to 2016, the increase in the average annual medical spending on claims for the enrollees in organizations that entered the AQC in 2009 was $461 lower per enrollee than spending in the control states (P<0.001), an 11.7% relative savings on claims. Savings on claims were driven in the early years by lower prices and in the later years by lower utilization of services, including use of laboratory testing, certain imaging tests, and emergency department visits. Most quality measures of processes and outcomes improved more in the AQC cohorts than they did in New England and the nation in unadjusted analyses. Savings were generally larger among subpopulations that were enrolled longer. Enrollees of organizations that entered the AQC in 2010, 2011, and 2012 had medical claims savings of 11.9%, 6.9%, and 2.3%, respectively, by 2016. The savings for the 2012 cohort were statistically less precise than those for the other cohorts. In the later years of the initial AQC cohorts and across the years of the later-entry cohorts, the savings on claims exceeded incentive payments, which included quality bonuses and providers' share of the savings below spending targets.

CONCLUSIONS

During the first 8 years after its introduction, the BCBS population-based payment model was associated with slower growth in medical spending on claims, resulting in savings that over time began to exceed incentive payments. Unadjusted measures of quality under this model were higher than or similar to average regional and national quality measures. (Funded by the National Institutes of Health.).

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.

The impact of global budget on the diffusion of innovations: the example of positron emission tomography in Taiwan

Background

The essence of global budget is to set a cap on the total national health insurance expenditure for a year, which is one form of prospective payment systems. It has always been argued that prospective payment, such as global budgeting, will deter the development of high-tech services in the healthcare industry. The objectives of this study are to explore the impact of global budgeting on the diffusion of high tech equipment in terms of utilization by using Positron Emission Tomography (PET) as an example.

Methods

The study population is the hospitals in Taiwan. We tried to compare the diffusion patterns of Computed Tomography (CT), Magnetic Resonance Imaging (MRI) and PET scanners among these hospitals by analyzing the National Health Insurance (NHI) Database from 1997 to 2010.

Results

From 2004 to 2010, 79,380 PET scans in total were performed under the NHI scheme. By the year 2010, the annual reimbursed scans have reached 19,700. The volume curve of cumulative PET services resembles an S diffusion curve with the R² at 0.95. The results indicated the growth of cumulative PET service volume does correspond with the innovation diffusion model. The cumulative utilizations of CT, MRI and PET demonstrate good correlation with no significant difference in their growth rates.

Conclusions

Therefore, we can infer that even though PET was reimbursed after the implementation of global budgeting, its diffusion was not deterred by this cost containment measure when compared with CT and MRI in the same time span after the inauguration of the NHI.