[PPT] - Outpatient Quality in Maryland Nicolae Done Department of Health PowerPoint Presentation

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AcademyHealth Annual Research Meeting – Innovative Payment Mechanisms in Maryland Hospitals

The Effect of Global Budgets on Hospital Utilization and Outpatient Quality in Maryland

Nicolae Done

Department of Health Policy and Management June 27, 2016

*I am grateful to the JHSPH Sommer Scholars Program for funding support for my doctoral studies. Based on joint work with Bradley Herring, Susan Hutfless, and Tim Xu.

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 Under a DRG-based system, hospitals receive payment per case  As long as payment > marginal cost, more admissions leads to more “profit”  Incentive to drive up admissions  Disincentive to provide high-quality preventive care  Facilitated by information asymmetries and regulatory inability to fully monitor quality

Context: Payment Incentives Affect Hospital Behavior

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 In 2010 – Total Patient Revenue (TPR) pilot program

 Essentially for rural hospitals

 In 2014 – Global Budget revenue – state-wide expansion

 Tweaks to the TPR to accommodate urban hospitals with overlapping service areas

 Each hospital is assigned a Primary Service Area (PSA) and Secondary Service Area (SSA)  Hospital is at risk for expenditures over the approved revenue but keeps any surplus

 One-time adjustments to next-year’s budget

 Market share changes monitored closely by HSCRC (Hospital Services Cost Review Commission), which regulates hospital rates for all payers and all hospitals in the state

Maryland Introduced Global Budgets for Hospitals in Two Waves

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 Base population

 Base year = FY2010  Residents living in hospital’s PSA and SSA

 Regulated services

 Inpatient and outpatient  At the hospital campus

 Adjustments

 Payer mix, variation in prices

 RESULT: APPROVED COMBINED TOTAL REVENUE

Key Features of the Global Budget Program

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1. Inpatient
A. Total admissions rate
B. Total inpatient days rate
C. Preventable admission rates (PQIs)

a)

Chronic

b) Acute

D. Readmissions rate
2. Outpatient
B. Total visits rate
C. ED visit rates

a)

Total

b) Preventable c)

Primary Care Treatable

Research Questions

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Did the TPR program decrease hospital utilization among residents in rural Maryland?

ED visits were categorized using the Billings criteria (Billings et al. 2000)

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 Difference-in-differences regression approach to adjust for time-varying confounders and control for unobserved heterogeneity and common trends

 Poisson model specification using counts as the outcome and population estimates

as the population at risk

1. TPR only – Rural Hospitals, 2008-2013 (excluding long-term global budgets hospitals)

A.

ZIP codes served by the TPR hospitals (N=147) with ZIP codes assigned to a control group of rural, non-participating hospitals (N=62)

B.

TPR hospitals compared to all non-participating hospitals in the state (another N=263 ZIP codes)

Study Design

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Main Empirical Model Specification

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~ Poisson( , exp{ } )

ict ict ic i t it it ct t

T Y X             

verdispersion parameter estimate of p Outcome for ZIP code at time Expected counts X ZIP code level time-varying characteristi rogr cs am effe ZIP code fixed effects Co ct unty-lev

it it it i ct

Y i O D t D             el time-varying characteristics year fixed effects

t

 

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 Discharge Abstracts Database from HSCRC: universe of inpatient discharge abstracts to non-federal acute care hospitals in Maryland

 Detailed information on date of admission, diagnoses (ICD-9), performed

procedures, patient demographics, ZIP code, etc.  Linked to ZIP-code level data from Claritas Demographic Reports and the Census Bureau  Supplemented with county-level data from the Area Resource File  Calendar Years 2008-2013

Data

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Characteristics of ZIP Codes in the Service Areas of TPR and Rural Control Hospitals

Pre-pilot (2008-2009) 2010-2013

TPR Rural Ctrl Urban TPR Rural Ctrl Urban

Average population 5,235 9,088 16,004 5,262 9,453 16,534 Percent female 49.8 50.1 50.7 50.5 50.8 51.0 Median age 40.0 37.5 37.8 42.8 40.9 39.7 Percent non-white 10.3 16.2 31.8 10.1 21.3 34.6 Median household income ($) 56,112 80,060 75,362 66,284 95,895 87,834 Percent unemployed 4.3 3.0 4.0 6.8 5.0 6.4 Percent at least college degree 17.6 26.5 33.6 19.8 29.5 34.4 Percent uninsured 13.5 10.4 12.5 12.4 9.4 11.9 Physicians per 1,000 pop. 1.5 1.5 3.2 1.5 1.4 3.2 PCPs per 1,000 pop. 0.2 0.2 0.2 0.2 0.2 0.2 Specialists per 1,000 pop. 1.3 1.3 3.0 1.3 1.2 3.0 Number of FQHCs 1.9 0.5 4.6 2.0 0.7 5.5

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