The results from the Maryland All-Payer Model were recently released by the U.S. Department of Health and Human Services (HHS). The model works by utilizing a global budget payment program under which all payers paid hospitals a fixed amount each year for rendered inpatient and outpatient services -- regardless of the actual amount of hospital utilization.
The new model means Maryland's hospitals received one yearly budget for health care services regardless of the number of patients that were admitted.
"This has the effect of incentivizing hospitals and their physicians to keep people healthy and out of the hospital as much as possible and to invest in prevention and population health," according to a HHS news release. "The first year cost and quality data below indicate that this global payment model and framework are already seeing promising results."
The results showed more than 90 percent of the state of Maryland's payments to hospitals were moved into global budgets.
"The initial cost results are promising," according to the release. "Maryland not only decreased the cost trend, but they also decreased absolute overall per capita Medicare hospital costs by 1.08 percent (compared with the national Medicare hospital cost trend which increased by 1.07 percent). As a result, the state of Maryland has already saved Medicare $116 million."
The quality results were also positive, with the quality measure of preventable conditions improving by more than 26 percent. Medicare fees also fell slightly.
