Is the Centralization of Complex Surgical Procedures an Unintended Spillover Effect of Global Capitation? – Insights from the Maryland Global Budget Revenue Program

To determine if global budget revenue (GBR) models incent the centralization of complex surgical care. SUMMARY BACKGROUND: In 2014, Maryland initiated a statewide GBR model. While prior research has shown improvements in cost and outcomes for surgical care post-GBR implementation, the mechanism remains unclear. METHODS: Utilizing state inpatient databases, we compared the proportion of adults undergoing elective complex surgeries (gastrectomy, pneumonectomy/lobectomy, proctectomies, and hip/knee revision) at high-concentration hospitals (HCHs) in Maryland and control states. Annual concentration, per procedure, was defined as hospital volume divided by state volume. HCHs were defined as hospitals with a concentration at least at the 75(th) percentile in 2010. We estimated the difference-in-differences (DiD) of the probability of patients undergoing surgery at HCHs before and after GBR implementation. FINDINGS: Our sample included 122,882 surgeries. Following GBR implementation, all procedures were increasingly performed at HCHs in Maryland. States satisfied the parallel trends assumption for the centralization of gastrectomy and pneumonectomy/lobectomy. Post-GBR, patients were more likely to undergo gastrectomy (DiD: 5.5 p.p., 95% CI [2.2, 8.8]) and pneumonectomy/lobectomy (DiD: 12.4 p.p., 95% CI [10.0, 14.8]) at an HCH in Maryland compared with control states. For our hip/knee revision analyses, we assumed persistent counterfactuals and noted a positive DiD post-GBR implementation (DiD: 4.8 p.p., 95% CI [1.3, 8.2]). No conclusion could be drawn for proctectomy due to different pre-GBR trends. CONCLUSIONS: GBR implementation is associated with increased centralization for certain complex surgeries. Future research is needed to explore the impact of centralization on patient experience and access.