Did Hospital Global Budgets Have an Impact on Health Care Use in Maryland?
<p>For more than four decades, Maryland had regulated prices for hospital services, but not total hospital spending. As a result, hospitals could maximize revenues by providing more services.</p><p>Starting in 2014, however, Maryland’s acute-care hospitals have been paid under a global budgeting system. The annual spending increase for all inpatient and hospital outpatient care is now determined in advance, creating an incentive for hospitals to provide services efficiently, step up prevention efforts, and invest in community services.</p>
<p>So how much has changed since global hospital budgets went into effect? According to the authors of a new Commonwealth Fund–supported study in <em>JAMA Internal Medicine, </em>while hospitals have met the global spending target, there has been no appreciable reduction in use of services — such as number of hospital stays, emergency department visits, and primary care visits — when compared to control counties outside the state. Hospitals have met their global budget by changing the prices of services rather than the volume of care provided. </p>
<p>The research team, led by University of Pittsburgh health economist Eric T. Roberts, speculates that by focusing only on hospital payments, Maryland’s global budgets haven’t aligned the incentives of hospitals with those of physicians. Recognizing this, the state is now planning to expand its program to include physicians.</p>