Did Maryland All-Payer Global Budgets Change Hospital Margins and Revenue per Discharge? A Comparative Interrupted Panel Analysis, 2010–2023 (Maryland vs. Massachusetts)

This project evaluates whether Maryland’s statewide all-payer hospital global budget revenue (GBR) model—implemented in 2014—was associated with measurable changes in hospital financial performance relative to a comparable non-GBR state (Massachusetts) over a long post-policy window (2010–2023). The study is motivated by ongoing policy interest in prospective, budget-based payment models as tools for cost containment and potential financial stabilization during volume shocks (e.g., the COVID-19 period). Despite extensive attention to Maryland’s all-payer model, evidence remains mixed regarding hospital-level financial consequences, particularly over longer horizons and with explicit design validity checks. The analysis uses a comparative interrupted panel design operationalized as a two-way fixed-effects difference-in-differences framework with hospital and year fixed effects and hospital-clustered standard errors. A hospital-year panel for acute-care hospitals in Maryland and Massachusetts (2010–2023) is constructed by merging (i) standardized hospital financial measures derived from Medicare cost report data (RAND HCRIS-derived files) with (ii) provider certification and facility characteristics from the CMS Provider of Services (POS) File – Hospital & Non-Hospital Facilities, linked at the CMS Certification Number (CCN) × fiscal-year level. The matched analytic file contains 2,261 hospital-year observations and is an unbalanced panel due to incomplete reporting and natural entry/exit across years. Three outcomes are examined. First, total hospital margin is used to test whether GBR coincided with changes in profitability. Second, a log revenue-per-discharge measure is used as a “unit revenue” proxy, recognizing that this metric reflects service mix, intensity, coding, payer composition, and accounting rather than a negotiated price. Third, a volatility outcome is defined as the absolute year-over-year change in total margin for consecutive years; this is used to test whether Maryland exhibited different margin stability during the COVID period (2020–2022) relative to Massachusetts. The project emphasizes defendable inference by incorporating multiple identification and validity checks. A dynamic event-study specification examines pre-policy differential trends and post-policy dynamics to assess the plausibility of the parallel trends assumption and to characterize time-varying effects. A placebo falsification test assigns a false treatment year (2012) within the pre-period to test for spurious discontinuities unrelated to GBR timing. Robustness checks include alternative specifications of the volatility outcome (including winsorization sensitivity) to evaluate whether results are driven by outliers or heavy-tailed financial measures. Expected outputs include: (i) descriptive trend figures for margins and log revenue per discharge by state, (ii) regression tables reporting the primary DiD estimates for each research question, (iii) an event-study figure and corresponding coefficient table for identification diagnostics, and (iv) a placebo table summarizing falsification results. Substantively, the study aims to clarify whether Maryland’s GBR is associated with changes in unit revenue measures without necessarily producing detectable average changes in profitability, and whether any differential stabilization during COVID can be detected in a two-state comparative panel. The expected contribution is a long-horizon, hospital-level financial evaluation of a prominent all-payer budget model, designed to inform policy debates about the mechanisms, guardrails, and performance metrics appropriate for scaling prospective payment reforms.