Global budgets for hospitals reduced expenditures and utilization for some Medicare subpopulations with complex health and social needs, yet disparities existed for some subgroups.
Alternative payment models (APMs), including global budgets, are increasingly being tested to improve quality and efficiency of care. However, there is limited existing evidence on APMs’ impact on health equity. This resource examines the impact of the Maryland All-Payer Model on several Medicare fee-for-service subpopulations based on the following variables: dual eligibility for Medicare and Medicaid, original reason for Medicare entitlement (age or disability), presence of multiple chronic conditions, race, and rural residency. The model was introduced in 2014 and established annual hospital revenue caps designed to limit growth in expenditures and improve quality.
Total expenditures and hospital expenditures for most subpopulations decreased relative to the out-of-state comparison group, except for non-white beneficiaries and beneficiaries without multiple chronic conditions. There were significant reductions in all-cause acute admissions for almost all subpopulations relative to their out-of-state comparison group. The study did not find impact on avoidable readmissions within 30 days after hospitalization for subpopulations examined, except for disabled beneficiaries who had larger reductions in readmissions as compared to aged beneficiaries.
In most cases, the model did not appear to either exacerbate inequities or close disparities in health utilization or quality, though there are some findings of concern. Most notably, likelihood of a follow-up visit within 14 days after hospital discharge decreased for dually eligible, disabled, and non-white subpopulations, relative to the comparison group.
This study suggests health systems may focus efforts to change care delivery practices for populations with complex health and social needs and underscores the need for further research on health equity impacts of APMs. More research is needed to understand the underlying factors contributing to different impacts of APMs on certain subpopulations, including communities of color. Considering health equity as an explicit goal in APM design may further this effort.