The impact of Medicare shared savings program participation on hospital financial performance: An event‐study analysis. (17th October 2022)

• Record Type: Journal Article
• Authors: Huang, Huang; Zhu, Xi; Ullrich, Fred; MacKinney, A. Clinton; Mueller, Keith
• Is Part Of: Health services research. Volume 58:Number 1(2023)
• Page Start: 116
• Page End: 127
• Publication Date: 2022-10-17
• Subjects: accountable care organizations -- financial performance -- hospital -- Medicare -- Medicare Shared Savings Program; Medical care -- Periodicals; Medical care -- Evaluation -- Periodicals; Hospital care -- Periodicals; Health services administration -- Periodicals; 362
• DOI: 10.1111/1475-6773.14085
• Languages: English
• ISSNs: 0017-9124

Abstract

Abstract: Objective: To evaluate the impact of hospitals' participation in the Medicare Shared Savings Program (MSSP) on their financial performance. Data Sources: Centers for Medicare & Medicaid Services Hospital Cost Reports and MSSP Accountable Care Organizations (ACO) Provider‐Level Research Identifiable File from 2011 to 2018. Study Design: We used an event‐study design to estimate the temporal effects of MSSP participation on hospital financial outcomes and compared within‐hospital changes over time between MSSP and non‐MSSP hospitals while controlling for hospital and year fixed effects and organizational and service‐area characteristics. The following financial outcomes were evaluated: outpatient revenue, inpatient revenue, net patient revenue, Medicare revenue, operating margin, inpatient revenue share, Medicare revenue share, and allowance and discount rate. Data Collection/Extraction Methods: Secondary data linked at the hospital level. Principal Findings: Controlling for trends in non‐MSSP hospitals, MSSP participation was associated with differential increases in net patient revenue by $3.28 million ( p < 0.001), $3.20 million ( p < 0.01), and $4.20 million ( p < 0.01) in the second, third, and fourth year and beyond after joining MSSP, respectively. Medicare revenue differentially increased by $1.50 million ( p < 0.05), $2.24 million ( p < 0.05), and $4.47 million ( p < 0.05) in the first, second, and fourth year and beyond. Inpatient revenue share differentially increased by 0.29% ( p < 0.05) in the second year and 0.44% ( p < 0.05) in the fourth year and beyond. Medicare revenue share differentially increased by 0.17% ( p < 0.01), 0.25% ( p < 0.01), 0.32% ( p < 0.01), and 0.41% ( p < 0.01) in consecutive years following MSSP participation. MSSP participation was associated with 0.33% ( p < 0.05) and 0.39% ( p < 0.05) differential reduction in allowance and discount rate in the second and third years. Conclusions: MSSP participation was associated with differential increases in net patient revenue, Medicare revenue, inpatient revenue share, and Medicare revenue share, and a differential reduction in allowance and discount rate.