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Balancing Efficiency and Access: Discouraging Emergency Department Boarding in a Global Budget System
Benoit Stryckman1, Diane Kuhn1, Daniel B Gingold1
1University of Maryland School of Medicine, Department of Emergency Medicine, Baltimore, Maryland.
Insights
Maryland's global budget system lowers Medicare spending but causes adverse effects like increased emergency department boarding. Policy remedies are proposed to mitigate these issues and improve hospital care.
Area of Science:
- Health Economics
- Healthcare Policy
- Hospital Management
Background:
- The United States faces high healthcare costs compared to similar nations.
- Maryland utilizes a unique hospital financing system called a global budget (capitation).
- This system aims to reduce costs without compromising patient care quality.
Purpose of the Study:
- To analyze the unintended consequences of Maryland's global budget system.
- To propose policy solutions for mitigating adverse effects on hospital operations.
- To offer insights for other alternative payment models.
Main Methods:
- Analysis of Maryland's global budget (capitation) payment system.
- Identification of unintended consequences, including emergency department boarding and ambulance diversion.
- Development of policy recommendations.
Main Results:
- Maryland's global budget system has led to reduced Medicare spending.
- Adverse consequences include increased emergency department boarding and ambulance diversion.
- These issues hinder hospitals' emergency care provision and safety net functions.
Conclusions:
- Policy interventions are needed to address the negative impacts of Maryland's global budget model.
- Mitigation strategies can help hospitals maintain their role in emergency care and serving vulnerable populations.
- Lessons from Maryland's experience can inform the development of other alternative payment mechanisms.
Abstract:
Reducing cost without sacrificing quality of patient care is an important yet challenging goal for healthcare professionals and policymakers alike. This challenge is at the forefront in the United States, where per capita healthcare costs are much higher than in similar countries around the world. The state of Maryland is unique in the hospital financing landscape due to its "capitation" payment system (also known as "global budget"), in which revenue for hospital-based services is set at the beginning of the year. Although Maryland's system has yielded many benefits, including reduced Medicare spending, it also has had unintentional adverse consequences. These consequences, such as increased emergency department boarding and ambulance diversion, constrain Maryland hospitals' ability to fulfill their role as emergency care providers and act as a safety net for vulnerable patient populations. In this article, we suggest policy remedies to mitigate the unintended consequences of Maryland's model that should also prove instructive for a variety of emerging alternative payment mechanisms.
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