Maryland’s Global Budget Program: Still a Viable Approach to Containing Growth in Health Care Costs

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<p>Secretary of Health and Human Services Alex Azar recently expressed his interest in continuing to use his agency’s authority to “drive the value-based transformation of our entire health system.” A <a href="/publications/journal-article/2018/apr/changes-hospital-utilization-three-years-marylands-global">Commonwealth Fund–supported study</a> published yesterday in <em>Health Affairs</em> analyzed the effects of one such approach: Maryland’s global budget for rural hospitals, which specifies the total amount of revenue acute-care hospitals can receive from all public and private payers. </p><p>The University of Pittsburgh’s Eric T. Roberts and colleagues showed that, compared to an in-state control group, Maryland’s program has had no discernible impact on hospital use or spending, despite hopes that it would reduce both. One reason, the researchers say, is the program’s focus on hospital care only: it does not include services provided outside hospitals, nor does it include payments to physicians. As a result, these providers have few incentives to change the way they deliver care.</p>
<p>In a <a href="/blog/2018/marylands-global-budget-program-still-option-containing-costs">companion post on <em>To the Point</em></a><em></em><em>, </em>the Commonwealth Fund’s Arnav Shah, Shawn Bishop, Christina Ramsay, and Eric Schneider, M.D., consider global budgets in the context of other payment reform initiatives. They say it’s premature to conclude that global budget models are not a viable path for future reform.  </p>
<p>“Since no single model is likely to suffice on its own to drive value throughout the health system,” the authors say, “comparing the global budget approach to other payment reform models may be less useful than refining each model and thinking about how the value-based payment reform models can be deployed in combination.”  </p> Learn more