| Sumario: | Background: Maryland implemented an all-payer hospital global budget revenue (GBR) model in 2014 to decouple hospital revenue from volume and improve revenue predictability. This study evaluated whether Maryland's 2014 GBR implementation was associated with differential changes in hospital total margins, inpatient revenue per discharge, and COVID-period margin volatility relative to Massachusetts. Methods: A matched hospital-year panel for Maryland and Massachusetts spanning 2010–2023 (2,261 matched observations) was constructed by merging Medicare cost report-based financial measures with provider characteristics using CMS certification identifiers. Two-way fixed-effects difference-in-differences models with hospital and year fixed effects and hospital-clustered standard errors estimated post-2014 changes in outcomes in Maryland relative to Massachusetts. Identification was assessed using an event-study specification and a placebo test (fake treatment in 2012, restricted to the pre-period). Financial stability under pandemic shock was evaluated using a COVID-period differential effect on margin volatility, defined as the absolute year-over-year change in total margin. An additional restricted sensitivity analysis for 2010–2019 adjusted for available case-mix and payer-mix covariates. Results: GBR implementation was not associated with a statistically detectable change in total margins (β = 0.021, p = 0.232). In contrast, GBR was associated with higher log inpatient revenue per discharge in Maryland relative to Massachusetts after 2014 (β = 0.287, p = 0.003), consistent with an approximate 33% increase in revenue per discharge (exp[0.287]−1). However, in the restricted 2010–2019 sensitivity analysis adjusting for available case-mix and payer-mix covariates, this association was attenuated and no longer statistically significant (β = 0.030, p = 0.513). Margin volatility during COVID-19 did not differ significantly between states (β = −0.018, p = 0.161). The placebo test showed no spurious effect in the pre-period (β = −0.008, p = 0.801), supporting the validity of the design. Conclusions: Maryland's all-payer global budgets were associated with higher revenue per discharge in the primary model, but with no detectable change in total margins or in differential margin volatility during COVID-19. The revenue-per-discharge finding was sensitive to adjustment for available case-mix and payer-mix covariates in a restricted sensitivity analysis, supporting a cautious interpretation. These findings are consistent with GBR altering revenue intensity without clear evidence of improved profitability or shock-absorbing effects over 2010–2023. Plain Language Summary: Most U.S. hospitals operate under a fee-for-service payment model, in which increased service delivery results in higher revenue. This structure can elevate costs and contribute to revenue instability. In contrast, since 2014, Maryland has implemented global budgets, establishing a fixed annual hospital revenue target across all payers. This study compared hospitals in Maryland and Massachusetts from 2010 to 2023 using Medicare cost-report financial data. The analysis focused on hospital profit margins, revenue per inpatient discharge (as a proxy for revenue intensity), and the extent of margin fluctuations during the COVID-19 period. Following the adoption of global budgets in Maryland, hospital revenue per discharge increased more in Maryland than in Massachusetts, while hospital margins did not change statistically. However, this revenue-per-discharge finding was less robust in a restricted sensitivity analysis that adjusted for available case-mix and payer-mix measures. There was also no strong evidence that Maryland hospitals experienced lower margin volatility during COVID-19 than Massachusetts hospitals. Overall, these results suggest that global budgets may alter the mechanisms by which hospitals generate revenue per case without producing substantial, detectable changes in profitability or financial stability during the pandemic period.
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