Refining the Recipe for Alternative Payment Models for Surgical Care-Importance of Patient Mix and Venue Match.

The transition from fee-for-service payment to a value-based reimbursement has proven challenging. Since its creation, the Center for Medicare and Medicaid Innovation (Innovation Center) has implemented more than 50 alternative payment models that reward health care practitioners for delivering high-quality, patient-centered, and cost-efficient care. To date, 6 of these models have generated savings to taxpayers: Accountable Care Organization (ACO) Investment Model; Home Health Value-Based Purchasing Model; Medicare Care Choices Model; Pioneer ACO Model; Prior Authorization of Repetitive, Scheduled Non-emergent Ambulance Transport Model, and the Maryland All-Payer Model (MAPM).1 The MAPM—which applies global caps on annual hospital expenditures and mandates reductions in avoidable clinical complications—generates a strong incentive by uncoupling revenue from the volume of services provided, and therefore has broad implications because it encompasses a substantial portion of health care spending. One of the key aims of this innovative all-payer approach is to provide incentives to clinicians to reduce preventable adverse patient outcomes and to decrease the use of unnecessary clinical services. Aliu and colleagues2 compare the quality of care and costs of hospitalization for several elective surgical procedures in Maryland to control states before and after implementation of the MAPM program. Global budgets, like the many other alternative payment models being implemented and evaluated by the Innovation Center and by private payers, alter the financial incentives for provision of clinical services, including the decision to perform elective surgery. Using a difference-indifference method, the authors conclude that Maryland experienced significantly reduced rates of avoidable surgical complications and lower increases in hospital costs. Although these positive results are notable, the authors acknowledge the uncertainty regarding whether these welcome findings are driven by the new payment model or by other factors, such as a documented shift in case mix toward younger and healthier patients in Maryland, or unmeasured influences such as potential spillover effects of these procedures being performed at ambulatory surgery centers. In addition to its potential impact on the reported outcomes of adverse effects and expenditures, the observed shift in case mix to younger, healthier patients raises the possibility of reduced clinical appropriateness of the procedures evaluated in certain circumstances, as the rates of coronary artery bypass graft, carotid endarterectomy, spinal fusion, cesarean delivery, hysterectomy, and joint arthroplasty vary widely across geographic regions, and these procedures are frequently performed in circumstances for which outcomes are of marginal, unknown, or no clinical benefit to the patient (eg, carotid endarterectomy in absence of symptoms). Thus, before solid conclusions can be made regarding how a change to global hospital budgets impacts health outcomes and expenditures of elective surgical care, more detailed information on equity effects, clinical appropriateness, and site of care are warranted. These data on elective surgical procedures add to the growing evidence base examining the effect of the MAPM on primary care use, hospitalizations, and cost of care.3 Maryland has built on its global hospital budget program to move to a Total Cost of Care Medicare model, where more outpatient care is capitated along with inpatient hospital services. Recently, the Innovation Center and health policy experts have advocated for reducing the number of payment models and working + Related article