Impacts of payment reform on racial disparities in hospital psychiatric care

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 DESCRIPTION (provided by applicant): In July 2014, Maryland implemented a statewide hospital payment reform that includes global capitated budgeting to increase efficiency and performance incentives to improve quality. By encouraging hospitals to address the unmet needs of minority patients, this sweeping change has the potential to reduce racial-ethnic disparities in care coordination for individuals who are hospitalized as a result of a mental healt condition. However, such payment reforms, if not carefully designed, could incentivize "safety-net" hospitals, which provide access to psychiatric care in low-income minority urban communities, to offer fewer psychiatric services in order to reduce costs. In this study, hospitals administrative data are used in a non-experimental difference-in-difference-in-differences regression framework to examine the effects of the Maryland payment reform on racial-ethnic disparities in hospital-based psychiatric care at safety-net and non-safety-net hospitals. The study's primary outcomes are receipt of outpatient follow-up and transitional care management services after a psychiatric inpatient stay, hospital readmission, and hospital spending per patient for psychiatric services. These impacts are identified by comparing changes in Maryland (the intervention state) with changes in Pennsylvania (the comparison state) after, versus before, July 2014. This proposed study is significant and timely because it can inform policymakers' assessments of how similar "value- based" hospital payment reforms in other states can be designed to improve care for minority patients while preserving the psychiatric care safety-net in low-income minority communities.