May 7, 2014

An innovative payment program in the state of Maryland may help improve heath care efficiency and reduce hospital readmissions, but no effects on readmission rates have been shown after the first 18 months of implementation, according to researchers at the School of Public Health. Department of Health Services Administration assistant professors Dr. Karoline Mortensen (pictured at top) and Dr. Jie Chen (pictured at bottom), along with Chad Perman of Health Management Associates, compared the performance of eight rural Maryland hospitals participating in the Total Patient Revenue (TPR) system, which aims to create positive financial incentives to reduce unnecessary admissions, to the performance of 30 control hospitals in the state using a traditional, primarily fee-for-service system. Their analysis has been published in the journal Healthcare.

"By providing a global budget for hospitals regardless of the number of patients treated and the amount of services provided, the TPR system incentivizes hospitals to improve administrative efficiency and invest in outpatient services to reduce readmission rates," says Dr. Mortensen, the study's lead author. "However, since it will take time for hospitals to streamline their outpatient and inpatient services toward integration, it is not surprising that we did not observe any effects on readmissions in the first 18 months of the program."

Using newly released data, the authors have expanded on these results and found improvements in outcomes in more recent years. This research has been selected for a "Best of the Annual Research Meeting (ARM)" session at the upcoming AcademyHealth 2014 meeting in San Diego. The "Best of ARM" sessions highlight some of the highest-quality abstracts presented at the Annual Research Meeting of AcademyHealth, the premier forum for health services research. Expert discussants put the featured research in context, and authors answer questions related to their work. Dr. Mortensen will participate in a special panel on "Payment Reform as a Driver for Innovation: Emerging Research" and present findings on Innovative Payment Mechanisms in Maryland Hospitals on Monday, June 9 from 4:45-6:15 p.m. The session will be recorded and made available after the conference.

View the paper in the journal Healthcare at

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