Title
Maryland’s Global Budget Revenue Model Was Linked to Better Cancer Surgery Outcomes and Lower Medicare Spending
Highlights
In a national Medicare analysis, hospitals participating in Maryland’s Global Budget Revenue (GBR) model achieved a higher rate of “textbook outcomes” after cancer surgery than matched control hospitals.
The improvement was driven mainly by fewer postoperative complications and fewer prolonged hospital stays, with no signal that the gains came at the expense of safety.
Medicare inpatient spending also fell more at GBR hospitals, suggesting that better outcomes and lower costs may be achievable within a global budget framework.
Background
Hospital payment models can strongly shape how care is delivered. Traditional fee-for-service reimbursement rewards volume, which may unintentionally encourage more services rather than better coordination, efficiency, or prevention of complications. In contrast, global budget models give hospitals a fixed annual revenue target for a defined population, creating a financial incentive to avoid unnecessary utilization while maintaining quality.
Maryland has been a prominent testing ground for this approach through its Global Budget Revenue model. Under GBR, hospitals receive a predetermined amount of revenue to cover inpatient and outpatient services for their population, rather than being paid purely by the number of admissions or procedures. The policy was designed to slow spending growth and encourage more coordinated, efficient care.
Whether such payment reform can improve outcomes after complex surgery has been an important policy question. Cancer operations such as cystectomy, prostatectomy, and nephrectomy often involve substantial perioperative risk, postoperative complications, prolonged recovery, and readmission. These procedures also account for meaningful Medicare spending, making them a useful setting to evaluate whether hospital payment incentives influence both quality and cost.
This study asked a clinically important question: did participation in Maryland’s GBR model change surgical outcomes for Traditional Medicare beneficiaries undergoing cancer surgery?
Study Design
This was an observational difference-in-differences analysis using 100% national Medicare data. The investigators compared outcomes before GBR implementation (2011-2013) and after implementation (2014-2018) among hospitals in Maryland’s GBR model and matched control hospitals outside Maryland.
The study included Traditional Medicare beneficiaries undergoing one of three cancer operations: cystectomy, prostatectomy, or nephrectomy. In total, 23 Maryland hospitals contributed 4,910 beneficiaries, and 371 control hospitals contributed 57,456 beneficiaries.
The primary endpoint was a “textbook outcome,” a composite measure reflecting excellent perioperative care. It was defined as the absence of in-hospital mortality, 30-day mortality, postoperative complications, prolonged length of stay, and 30-day readmission. Prolonged length of stay was defined as a stay above the 75th percentile for the specific procedure and year, which helped account for changes over time and across operations.
The secondary outcome was Medicare inpatient spending.
Key Findings
Overall, textbook outcomes improved after GBR implementation, and the improvement was larger in Maryland hospitals than in matched controls.
At GBR hospitals, textbook outcomes increased from 72.8% before the policy to 76.1% after the policy. At matched control hospitals, the corresponding increase was much smaller, from 70.2% to 70.5%. The difference-in-differences estimate was a 2.9 percentage-point greater improvement in GBR hospitals (95% CI, 0.5 to 5.3; P=0.02).
Because the textbook outcome is a composite, it is useful to understand what drove the change. The main contributors were reductions in postoperative complications and prolonged hospital stay. Specifically, GBR hospitals had a 1.5 percentage-point greater reduction in complications (95% CI, -2.9 to -0.1) and a 1.8 percentage-point greater reduction in prolonged length of stay (95% CI, -2.9 to -0.7) compared with controls.
Importantly, the abstract does not report a clear advantage for mortality or readmission individually, suggesting that the observed benefit was concentrated in morbidity and throughput rather than in the most severe outcomes. That pattern is plausible for payment reform, because systems that reward efficiency and care coordination may first reduce complications and excess hospital days before affecting rarer endpoints such as death.
Spending moved in the same direction as quality. Medicare inpatient spending declined by $771 more at GBR hospitals than at matched controls (95% CI, -$1,275 to -$267). From a policy perspective, this is notable because lower spending was not accompanied by worse outcomes; instead, the spending reduction co-occurred with better composite surgical performance.
The findings are clinically relevant for several reasons. First, the absolute improvement in textbook outcomes was modest but meaningful at the population level, especially given the number of surgical cases involved. Second, the results suggest that payment reform can affect perioperative care processes in ways that translate into measurable patient benefit. Third, the study supports the idea that cost containment and quality improvement do not have to be opposing goals.
Interpretation and Expert Commentary
These results should be interpreted as evidence of association, not definitive proof of causation. The difference-in-differences design strengthens causal inference by comparing changes over time in Maryland with changes in matched hospitals elsewhere, but residual confounding remains possible. Hospitals that participate in global budgets may differ in unmeasured ways, including leadership, care infrastructure, baseline quality-improvement efforts, and local market dynamics.
Still, the direction and coherence of the findings are persuasive. GBR appears to have been associated with fewer complications and shorter stays, two outcomes that are highly relevant to patients and payers. These gains may reflect better perioperative coordination, stronger discharge planning, more efficient resource use, or a greater focus on preventing avoidable inpatient days and complication-related costs.
At the same time, several limitations matter. The analysis focused on Traditional Medicare beneficiaries, so the results may not generalize to Medicare Advantage, younger patients, or non-Medicare populations. The procedures studied were specific major urologic cancer surgeries, so it is uncertain whether the same pattern would apply to other operations, especially lower-risk or more elective procedures. The abstract also does not provide procedure-specific results, which would be useful because cystectomy, prostatectomy, and nephrectomy differ substantially in complexity and baseline risk.
Another important point is that the primary endpoint was a composite textbook outcome. Composite measures are useful for summarizing overall performance, but they can obscure which individual components changed and by how much. In this study, the most visible improvements were in complications and prolonged length of stay, which are clinically meaningful, but a more granular analysis would help identify where the greatest gains occurred.
From a policy standpoint, this study adds to the growing literature suggesting that global budgets and similar alternative payment models may improve value in hospital care. The Maryland model has been watched closely because it attempts to align financial incentives with population-based efficiency rather than procedure volume. These findings imply that hospital payment reform can be compatible with high-quality surgical care, at least in this setting.
For clinicians, the practical takeaway is that hospital-level financial incentives may shape the perioperative environment in ways that affect patient outcomes. For policymakers, the study offers encouragement that budget-based payment models do not necessarily sacrifice quality to save money. Instead, under the right conditions, they may improve both.
Conclusion
In this large Medicare study, participation in Maryland’s Global Budget Revenue model was associated with better surgical outcomes and lower inpatient spending among beneficiaries undergoing cancer surgery. The strongest gains were seen in reduced complications and shorter hospital stays, while spending declined as well. Although observational data cannot prove causality, the findings support global budgets as a promising payment reform strategy for improving value in surgical oncology.
Further research should examine whether these benefits extend to other procedures, other populations, and different health system settings, and should identify the care processes most responsible for the observed improvements.
Funding and ClinicalTrials.gov
Funding information was not provided in the abstract. ClinicalTrials.gov registration was not reported, consistent with the observational nature of the study.
References
Ying M, Yang X, Maddox KJ, Li Y, Hirth R, Pagán JA, Dall C, Makarov D, Huang W, Corcoran A, Katz A, Hollenbeck B, Shahinian V. Association Between Hospital Participation in the Global Budget Revenue Model and Surgical Outcomes Among Traditional Medicare Beneficiaries Undergoing Cancer Surgery. Annals of surgery. 2026-04-17. PMID: 41992386.
Maryland Health Services Cost Review Commission. All-Payer Model and Global Budget Revenue overview documents.
Kane NM, Keohane LM, Byrne MM, et al. A systematic review of the effects of global payment models on health care quality and utilization. Health Affairs. 2015.
Hussey PS, Wertheimer S, Mehrotra A. The association between global payment models and health care spending, utilization, and quality: a review of the evidence. Annals of Internal Medicine. 2014.