Under Global Budgets, Hospital Utilization In Maryland Decreased By 11 Percentage Points More Than In Other States, 2013–23

Maryland hospitals have operated under all-payer global budget models since 2014. Within Medicare, evaluations have estimated the resulting cost savings to be 1. 6 billion for the period 2014-22. To understand the aggregate inpatient and outpatient utilization changes underlying these savings and how utilization changed across all ages, we analyzed trends in Maryland relative to other states during the period 2013-23. We used national commercial claims data alongside Medicare fee-for-service claims. After we adjusted for population aging and other demographic changes, hospital utilization in Maryland decreased 11 percentage points more than in other states, primarily driven by outpatient utilization trends, which were 19 percentage points lower in Maryland than elsewhere. These results are nationally relevant, given broad interest in addressing rising hospital outpatient utilization. However, there are risks in such utilization reductions, and global budget designs must consider payment levels that are fair for both payers and providers while embedding mechanisms that maintain quality and discourage stinting on patient care.