Maryland's All-Payer Model and Hospital Financial Stability: A Comparative Analysis with Massachusetts

Background: Maryland's all-payment model (APM) replaces fee-for-service hospital payments with regulated global budgets to stabilize finances and restrain costs. Evidence of how this model affects hospital margins and prices relative to similar fee-for-service states remains limited. Objective: To compare trends in hospital financial margins and inpatient prices in Maryland and Massachusetts from 2017 to 2024. We hypothesized that Maryland hospitals would exhibit more stable margins and lower overall price levels than Massachusetts hospitals, under regulated global budgets. Methods: We used hospital-level panel data from the RAND Hospital Cost Report Information System for fiscal years 2017–2024, restricted to acute-care hospitals in Maryland and Massachusetts. The outcomes were total margin and log inpatient revenue per discharge (proxy for price per discharge). A difference-in-differences fixed-effects model with hospital and year fixed effects and standard errors clustered at the hospital level compared changes before and after 2019, when Maryland's Total Cost of Care phase began (md×post2019). Results: At baseline, Maryland hospitals had slightly higher margins and lower prices than Massachusetts hospitals (mean total margin 0.019 vs –0.073; mean log price per discharge 9.27 vs 9.49). After 2019, there was no statistically significant difference in the total margins between Maryland and Massachusetts (β = –0.001, SE = 0.003, p = 0.76). In contrast, log inpatient revenue per discharge grew modestly faster in Maryland, from a lower starting level (β = 0.072, SE = 0.025, p = 0.004), although Maryland prices remained below Massachusetts levels by 2024. Conclusions: Maryland's all-payer global budget system appears compatible with stable hospital margins and a loweroverall price level relative to a benchmark fee-for-service state, but it was not associated with slower post-2019 price growth. Global budgets may support financial stability and moderate price levels, yet they should not be assumed to produce stronger price restraints than well-regulated fee-for-service benchmarks.