Hospital episode spending for acute inpatient hospitalizations decreased following the US Patient Protection and Affordable Care Act (ACA), according to a recent publication in JAMA Network Open (2020;3[11]:e2023926. doi:10.1001/jamanetworkopen.2020.23926).
“Under the Patient Protection and Affordable Care Act (ACA), US hospitals were exposed to a number of reforms intended to reduce spending, many of which, beginning in 2012, targeted acute care hospitals and often focused on specific diagnoses (e.g., acute myocardial infarction, heart failure, and pneumonia) for Medicare patients,” wrote Andrew Ibrahim, MD, MSc, Institute for Healthcare Policy and Innovation, University of Michigan, Ann Arbor, and colleagues.
This study aimed to evaluate the association between the enactment of ACA reforms and 30-day price-standardized hospital episode spending.
Data from a random sample of Medicare beneficiary discharges between January 1, 2008 and August 31, 2015 were evaluated to examine payment reforms after the passage of the ACA.
Three approaches were used to analyze the relationship between reforms following the ACA and episode spending: a difference-in-difference (DID) analysis among acute care hospitals, comparing spending for diagnoses commonly targeted by ACA programs with nontargeted diagnoses; a DID analysis comparing acute care hospitals and critical access hospitals (not exposed to reforms); and a generalized synthetic control analysis, comparing acute care and critical access hospitals.
A total of 7,634,242 index discharges were included in the study. All 3 estimation approaches found significant reductions in episode spending. Generalized synthetic control analysis suggested that savings amounted to a total annual savings of $5.68 billion.
The greatest reductions in episode spending were in index admission and readmissions and in areas with lower Medicare Advantage enrollment.
“Our findings are consistent with national data showing virtually no growth in hospital inpatient spending following the ACA and greater spending growth for critical access hospitals compared with acute care hospitals,” concluded Dr Ibrahim and colleagues.—Lisa Kuhns
