The Effects of Global Budgeting on Emergency Department Admission Rates in Maryland

Study objective In 2014, Maryland launched a population-based payment model that replaced fee-for-service payments with global budgets for all hospital-based services. This global budget revenue program gives hospitals strong incentives to tightly control patient volume and meet budget targets. We examine the effects of the global budget revenue model on rates of admission to the hospital from emergency departments (EDs). Methods We used medical record and billing data to examine adult ED encounters from January 1, 2012, to December 31, 2015, in 25 hospital-based EDs, including 10 Maryland global budget revenue hospitals, 10 matched non-Maryland hospitals (primary control), and 5 Maryland Total Patient Revenue hospitals (secondary control). Total Patient Revenue hospitals adopted global budgeting in 2010 under a pilot Maryland program targeting rural hospitals. We conducted difference-in-differences analyses for overall ED admission rates, ED admission rates for ambulatory-care-sensitive conditions and non–ambulatory-care-sensitive conditions, and for clinical conditions that commonly lead to admission. Results In 3,175,210 ED encounters, the ED admission rate for Maryland global budget revenue hospitals decreased by 0.6% (95% confidence interval –0.8% to –0.4%) compared with that for non-Maryland controls after global budget revenue implementation, a 3.0% relative decline, and decreased by 1.9% (95% confidence interval –2.2% to –1.7%) compared with that for Total Patient Revenue hospitals, a 9.5% relative decline. Relative declines in ED admission rates were similar for ambulatory-care-sensitive-condition and non–ambulatory-care-sensitive-condition encounters. Admission rate declines varied across clinical conditions. Conclusion Implementation of the global budget revenue model led to statistically significant although modest declines in ED admission rates within its first 2 years, with declines in ED admissions most pronounced among certain clinical conditions.