The Impact of Maryland’s Global Budget Payment Reform on Emergency Department Admission Rates in a Single Health System
Jessica E. Galarraga, MD, MPH, William J. Frohna, MD, and Jesse M. Pines, MD, MBA, MSCE
Acad Emerg Med. 2019 Jan;26(1):68-78. PMID: 29931705
Abstract: In 2014, the state of Maryland (MD) moved away from fee-for-service payments and into a global
budget revenue (GBR) structure where hospitals have a fixed revenue target, independent of patient volume or
services provided. We assess the effects of GBR adoption on emergency department (ED) admission decisions
among adult encounters.
We used hospital medical record and billing data from adult ED encounters from January 1, 2011,
through December 31, 2015, with four MD hospitals and two District of Columbia (DC) hospitals within the same
health system. We performed difference-in-differences analysis and calculated the effects of the GBR model on
ED admission rates (inpatient and observation) using hospital fixed-effect regression adjusted for patient, hospital,
and community factors. We also examined changes in the distribution of acuity among ED admissions with GBR
adoption.
The study sample included 1,492,953 ED encounters with a mean ED admission rate of 20.5%. The ED
admission rate difference pre- and post-GBR was –1.14% (95% confidence interval [CI] = –0.89 to –1.40) for MD
hospitals and –0.04% (95% CI = –0.24 to 0.32) for DC hospitals with a difference-in-differences result of
–1.10% (95% CI = –1.34 to –0.86). This change was attributable to a –3.3% (95% CI = –3.54 to –3.08) decline in
inpatient admissions and 2.7% (95% CI = 2.53 to 2.79) increase in observation admissions. Declines in
admissions were observed primarily among mild-to-moderate severity of illness encounters with a low risk of
mortality.
Within the same health system, implementation of global budgeting in MD hospitals was
associated with a decline in ED admissions—particularly lower-acuity admissions—compared to DC hospitals that
remained under fee-for-service payments…