Medical care research and review : MCRR
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In 2014, Maryland incorporated global budgets into its long-running all-payer rate-setting model for hospitals in order to improve health, increase health care quality, and reduce spending. We used difference-in-differences models to estimate changes in Medicare and commercial insurance utilization and spending in Maryland relative to a hospital-based comparison group. ⋯ Relative declines in emergency department and other hospital outpatient spending in Maryland drove slower Medicare hospital spending growth, saving $796 million. Our findings suggest global budgets reduce hospital spending and utilization but aligning incentives between hospital and nonhospital providers may be necessary to further reduce utilization and total spending.