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The Effects of Global Budgeting on Emergency Department Admission Rates in Maryland
Jessica E Galarraga1, Bernard Black2, Laura Pimentel3
1Department of Health Care Delivery Research, MedStar Health Research Institute, Hyattsville, MD; Department of Emergency Medicine, MedStar Washington Hospital Center, Georgetown University School of Medicine, Washington, DC.
Insights
Maryland’s global budget revenue model modestly reduced hospital admissions from emergency departments (EDs). This population-based payment reform showed significant declines in ED admission rates, particularly for specific clinical conditions.
Area of Science:
- Health Economics and Policy
- Healthcare Management
- Emergency Medicine
Background:
- Maryland implemented a population-based payment model in 2014, replacing fee-for-service with global budgets for hospital services.
- This model incentivizes hospitals to manage patient volume and adhere to budget targets.
- The impact of this reform on emergency department (ED) admission rates requires examination.
Purpose of the Study:
- To evaluate the effect of Maryland's global budget revenue (GBR) model on hospital admission rates originating from emergency departments (EDs).
- To compare admission rates between GBR hospitals and control groups (non-Maryland hospitals and Maryland Total Patient Revenue hospitals).
- To analyze admission rate changes for various condition types, including ambulatory-care-sensitive conditions.
Main Methods:
- Utilized medical record and billing data for adult ED encounters from January 1, 2012, to December 31, 2015.
- Included 25 hospital-based EDs: 10 Maryland GBR hospitals, 10 matched non-Maryland control hospitals, and 5 Maryland Total Patient Revenue (TPR) hospitals.
- Employed difference-in-differences analyses to assess changes in ED admission rates.
Main Results:
- Maryland GBR hospitals experienced a 0.6% decrease in ED admission rates compared to non-Maryland controls (3.0% relative decline).
- A more significant decrease of 1.9% (9.5% relative decline) was observed when compared to Maryland TPR hospitals.
- Declines were consistent across ambulatory-care-sensitive and non-ambulatory-care-sensitive conditions, though varied by specific clinical diagnoses.
Conclusions:
- The global budget revenue model implementation resulted in statistically significant, albeit modest, reductions in ED admission rates within two years.
- The most pronounced decreases in ED admissions were noted for certain clinical conditions.
- This suggests that population-based payment models can influence hospital admission patterns from emergency departments.
Study Objective:
In 2014, Maryland launched a population-based payment model that replaced fee-for-service payments with global budgets for all hospital-based services. This global budget revenue program gives hospitals strong incentives to tightly control patient volume and meet budget targets. We examine the effects of the global budget revenue model on rates of admission to the hospital from emergency departments (EDs).
Methods:
We used medical record and billing data to examine adult ED encounters from January 1, 2012, to December 31, 2015, in 25 hospital-based EDs, including 10 Maryland global budget revenue hospitals, 10 matched non-Maryland hospitals (primary control), and 5 Maryland Total Patient Revenue hospitals (secondary control). Total Patient Revenue hospitals adopted global budgeting in 2010 under a pilot Maryland program targeting rural hospitals. We conducted difference-in-differences analyses for overall ED admission rates, ED admission rates for ambulatory-care-sensitive conditions and non-ambulatory-care-sensitive conditions, and for clinical conditions that commonly lead to admission.
Results:
In 3,175,210 ED encounters, the ED admission rate for Maryland global budget revenue hospitals decreased by 0.6% (95% confidence interval -0.8% to -0.4%) compared with that for non-Maryland controls after global budget revenue implementation, a 3.0% relative decline, and decreased by 1.9% (95% confidence interval -2.2% to -1.7%) compared with that for Total Patient Revenue hospitals, a 9.5% relative decline. Relative declines in ED admission rates were similar for ambulatory-care-sensitive-condition and non-ambulatory-care-sensitive-condition encounters. Admission rate declines varied across clinical conditions.
Conclusion:
Implementation of the global budget revenue model led to statistically significant although modest declines in ED admission rates within its first 2 years, with declines in ED admissions most pronounced among certain clinical conditions.
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