The effects of global budget payments on hospital utilization in rural Maryland

Objective: To assess the effect of Maryland's 2010 Total Patient Revenue (TPR) global budget reform in eight rural hospitals on population-level hospital rates of utilization three years after implementation. Data Sources/Study Setting: Data on all inpatient discharges and outpatient department visits from the Health Services Cost Review Commission, population data from Claritas Demographic Reports, and county-level data from the Area Health Resource File. Study Design: We use a difference-in-differences approach to compare changes in utilization rates over time in the reform areas comprising 125 Zip Code Tabulation Areas (ZCTAs) and in two control hospital areas (66 ZCTAs and 327 ZCTAs, respectively). We examine several inpatient and outpatient measures and distinguish between relatively discretionary and nondiscretionary utilization. Data Collection: Admissions data are hospital-reported discharge abstracts of all encounters in Maryland during 2008-2013. Population data are derived from the US Census. Principal Findings: We find no statistically significant changes in admissions, either overall or discretionary. We find a statistically significant 8.9 percent (95%CI = [1.8, 16.0]) reduction in outpatient visits, with a statistically significant reduction of 14.8 percent (95%CI = [5.3, 24.3]) visits not to the Emergency Department. Conclusions: We find that the TPR reform decreased outpatient utilization but did not affect inpatient utilization.