Abstract
Since 2014, all hospitals in Maryland have operated under an all-payer global budget system. Hospital global budgets have gained renewed attention as a strategy for constraining cost growth, improving patient outcomes, and preserving health care access in rural and underserved communities. Lessons from the implementation of the Maryland All-Payer Model (MDAPM) may have implications for policy makers, payers, and hospitals in other settings seeking to adopt global budgets or other value-based payment models. To examine perspectives on the implementation of the MDAPM among health care leaders who participated in its design and execution. This qualitative study with semistructured telephone interviews was conducted from November 1, 2019, to February 11, 2020. The purposive sample of Maryland health care leaders represents diverse stakeholder groups, including hospitals, state government and regulatory agencies, the federal government, and payers. Key high-level themes were extracted from interviews using qualitative content analysis, with barriers and facilitators to implementation specified within each theme. A total of 20 interviews were conducted with hospital leaders (n = 6), state regulators (n = 4), federal regulators (n = 4), payer representatives (n = 3), and state leaders (n = 3). Key themes were labeled as (1) expectations (setting bold yet achievable goals), (2) autonomy (allowing hospitals to follow individual strategies within MDAPM parameters), (3) communication (encouraging early and ongoing communication between stakeholders), (4) actionable data (sharing useful hospital and patient-level data between stakeholders), (5) global budget calibration (anticipating technical challenges when negotiating budgets for individual hospitals), and (6) shared commitment to change (harnessing collective motivation for system change). Together, these themes suggest that implementing the payment model followed an evolving and collaborative process that requires stakeholder communication, data to guide decisions, and commitment to operating within the new payment system. The implementation of hospital global budgets in the state of Maryland offers generalizable lessons that can inform the evolution and expansion of this approach to value-based payment in other states and settings.
Highlights
In 2014, Maryland implemented global budgets for all acute care hospitals.[1,2] Developed as a model test by the Centers for Medicare & Medicaid Services (CMS), Center for Medicare and Medicaid Innovation, and Maryland’s Health Services Cost Review Commission (HSCRC), the Maryland All-Payer Model (MDAPM) specified annual targets for growth in Medicare and all-payer hospital expenditures.[3]
Meaning The findings of this study suggest that the experience of implementing hospital global budgets in Maryland can inform the development of future payment models that seek to constrain cost growth, improve patient outcomes, and preserve access to health care
We examined perspectives on the MDAPM among health care leaders in Maryland who participated in its design and implementation
Summary
In 2014, Maryland implemented global budgets for all acute care hospitals.[1,2] Developed as a model test by the Centers for Medicare & Medicaid Services (CMS), Center for Medicare and Medicaid Innovation, and Maryland’s Health Services Cost Review Commission (HSCRC), the Maryland All-Payer Model (MDAPM) specified annual targets for growth in Medicare and all-payer hospital expenditures.[3] The global budget, consisting of hospital inpatient and outpatient revenue, was the method to achieve those targets.[4] The state had previously used a rate-setting system that regulated hospital prices for all payers, operating under an exemption from the Medicare Inpatient and Outpatient Prospective Payment Systems.[5] The agreement to establish the MDAPM allowed the state to continue this exemption and build on 4 years of experience in setting global budgets for 10 rural hospitals.[6]. Hospitals may be motivated to reduce avoidable use, whether by preventing readmissions, reducing iatrogenic complications, or, further upstream, addressing population health.[5,6,7,8,9,10,11] This approach can incorporate safeguards to ensure that patients receive appropriate care while avoiding excessive financial risk to hospitals.[4]
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