An Empirical Analysis of Maryland’s All-Payer Model Three Years After Its Implementation
Barselau, Austin Michael
As health care spending continues to rise, policymakers are developing innovative methods to control costs while improving both the efficiency and quality of care delivered. Maryland provides a case study for exploring the effectiveness of recent health policy that reforms hospital payments. Maryland’s All-Payer Model uses a global budget to provide hospitals with a fixed prospective payment based on total hospital costs per capita to improve care management practices and mitigate low value treatments. At the same time, Maryland was also among the first states to expand Medicaid eligibility for low-income individuals including pregnant women and the elderly under the Affordable Care Act (ACA). This led to large increases in demand for health care, especially for hospital services. This study seeks to build on previous studies to examine the potential impact of Maryland’s global budget on hospitalization cost in light of the ACA Medicaid expansion. It finds that, after controlling for patient, hospital, and payer characteristics, average cost per inpatient stay in Maryland increased at least by seven percent after three years of implementation.
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