Study finds Md. all-payer system not producing major changes

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A study appearing in Health Affairs Monday found that Maryland’s all-payer global budgeting system may not have produced the systemic changes to hospital use promised when the system began to be adopted in 2011.

But the state and Maryland hospitals reject the study as an incomplete view of just seven rural hospitals and said it missed several key changes added to the system since it went statewide in 2014.

“Analyses of performance in later years reveals that Maryland’s transformation is delivering demonstrably lower costs and higher quality,” said Jim Reiter, a spokesman for the Maryland Hospital Association.

The article, researched by investigators from the University of Pittsburgh, Harvard Medical School and Boston University School of Medicine, studied seven rural Maryland hospitals where global budgeting was implemented from 2011 through 2013, before the global budgeting system went statewide.

While Maryland realized hospital cost savings under the global budgeting system, the study found there was not much evidence to suggest the changes had improved health outcomes in the state.

“The easy part is to say you met your budget,” said Ateev Mehrotra, an associate professor at Harvard Medical School and one of the study’s investigators. “We didn’t really find any substantive evidence that there were any changes in care patterns than what we would have expected if this new program hadn’t been implemented.”

Last month, the state released results through 2016 of the first three years of the statewide model.

RTI International, a nonprofit health research firm, found that through the first three years of the model, the state had saved money and reduced admissions and readmissions in a report released Friday. There was an aggregate $679 million in savings to Medicare during the first three years of the model.

Those cost savings included a 9.4 percent reduction in admissions for ambulatory care sensitive conditions.

For commercial payers, there were 4 percent fewer all-cause hospital admissions and 4 percent fewer admissions for ambulatory sensitive conditions.

These changes show the model has improved the quality of care in Maryland, supporters said.

The Health Affairs study missed several important changes to the model after it began statewide use in 2014, Reiter said.

“The broader system, developed in 2013 and implemented in 2014, includes important policy changes like value-based purchasing elements and readmission reductions and other quality-based targets that had not been included in the initial program,” he said.

Another change to the model came just last year because it needed legislative approval. A change to the physician referral laws allowed hospitals to begin to bring doctors onto the system.

Traditionally, the doctors had been paid on a fee-for-service basis, even as hospitals adapted to global budgets. Under an addendum to the all-payer model, incentives for care can be better aligned.

“Now we can facilitate payment alignment between hospitals (on a per-capita payment system) and non-hospital providers (on a fee-for-service payment system),” Reiter said.

Not having alignment between doctors and hospitals was a problem the researchers identified with their study of the initial seven rural hospitals.

“When people think of this global budget system in Maryland, they think it’s global,” said Eric T. Roberts, an assistant professor in the University of Pittsburgh’s Graduate School of Public Health and the lead author of the article.

The researchers also acknowledged the smaller sample size they studied than the statewide sample from a couple of years later. But they said other models showed results quicker.

“On a health care side there are payment models that have shown more immediately discernible improvements on health care delivery,” Roberts said.

But they also encouraged Maryland to continue experimenting with payment models.

“We also want to emphasize, it’s really important to try out these different models and find out how alternatives to traditional fee-for-service models work,” Mehrotra said. “If we don’t experiment, we don’t know how these models work.”

Maryland aims to continue that experimentation soon, with a new contract with the Centers for Medicare and Medicaid Services. That contract, the Total Cost of Care Model, will look to adapt more primary care providers into the all-payer system. The state also plans to have that model run 10 years, instead of the 5-year contract for the current model.