Assessment of Costs and Care Quality Associated with Major Surgical Procedures after Implementation of Maryland's Capitated Budget Model

Abstract

Importance: In 2014, Maryland implemented the all-payer model, a distinct hospital funding policy that applied caps on annual hospital expenditures and mandated reductions in avoidable complications. Expansion of this model to other states is currently being considered; therefore, it is important to evaluate whether Maryland's all-payer model is achieving the desired goals among surgical patients, who are an at-risk population for most potentially preventable complications. Objective: To examine the association between the implementation of Maryland's all-payer model and the incidence of avoidable complications and resource use among adult surgical patients. Design, Setting, and Participants: This comparative effectiveness study used hospital discharge records from the Healthcare Cost and Utilization Project state inpatient databases to conduct a difference-in-differences analysis comparing the incidence of avoidable complications and the intensity of health resource use before and after implementation of the all-payer model in Maryland. The analytical sample included 2983411 adult patients who received coronary artery bypass grafting (CABG), carotid endarterectomy (CEA), spinal fusion, hip or knee arthroplasty, hysterectomy, or cesarean delivery between January 1, 2008, and December 31, 2016, at acute care hospitals in Maryland (intervention state) and New York, New Jersey, and Rhode Island (control states). Data analysis was conducted from July 2019 to July 2021. Exposures: All-payer model. Main Outcomes and Measures: Complications (infectious, cardiovascular, respiratory, kidney, coagulation, and wound) and health resource use (ie, hospital charges). Results: Of 2983411 total patients in the analytical sample, 525 262 patients were from Maryland and 2458 149 were from control states. Across Maryland and the control states, there were statistically significant but not clinically relevant differences in the preintervention period with regard to patient age (mean [SD], 49.7 [19.0] years vs 48.9 [19.3] years, respectively; P