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The impact of Medicare shared savings program participation on hospital financial performance: An event-study
Huang Huang1,2, Xi Zhu3, Fred Ullrich2
1Department of Health Management and Policy, University of Kentucky College of Public Health, Lexington, Kentucky, USA.
Objective:
To evaluate the impact of hospitals' participation in the Medicare Shared Savings Program (MSSP) on their financial performance.
Data Sources:
Centers for Medicare & Medicaid Services Hospital Cost Reports and MSSP Accountable Care Organizations (ACO) Provider-Level Research Identifiable File from 2011 to 2018.
Study Design:
We used an event-study design to estimate the temporal effects of MSSP participation on hospital financial outcomes and compared within-hospital changes over time between MSSP and non-MSSP hospitals while controlling for hospital and year fixed effects and organizational and service-area characteristics. The following financial outcomes were evaluated: outpatient revenue, inpatient revenue, net patient revenue, Medicare revenue, operating margin, inpatient revenue share, Medicare revenue share, and allowance and discount rate.
Data Collection/Extraction Methods:
Secondary data linked at the hospital level.
Principal Findings:
Controlling for trends in non-MSSP hospitals, MSSP participation was associated with differential increases in net patient revenue by $3.28 million (p < 0.001), $3.20 million (p < 0.01), and $4.20 million (p < 0.01) in the second, third, and fourth year and beyond after joining MSSP, respectively. Medicare revenue differentially increased by $1.50 million (p < 0.05), $2.24 million (p < 0.05), and $4.47 million (p < 0.05) in the first, second, and fourth year and beyond. Inpatient revenue share differentially increased by 0.29% (p < 0.05) in the second year and 0.44% (p < 0.05) in the fourth year and beyond. Medicare revenue share differentially increased by 0.17% (p < 0.01), 0.25% (p < 0.01), 0.32% (p < 0.01), and 0.41% (p < 0.01) in consecutive years following MSSP participation. MSSP participation was associated with 0.33% (p < 0.05) and 0.39% (p < 0.05) differential reduction in allowance and discount rate in the second and third years.
Conclusions:
MSSP participation was associated with differential increases in net patient revenue, Medicare revenue, inpatient revenue share, and Medicare revenue share, and a differential reduction in allowance and discount rate.
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