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Maryland's Health Enterprise Zones Generate Strong ROI

Analysis  |  By John Commins  
   October 03, 2018

The five zones saw 40,000 additional ER visits, 18,562 fewer inpatient stays, and a net savings of $108 million over four years for a program that cost the state $15 million to implement.

Maryland's state-funded Health Enterprise Zones have seen large reductions in inpatient stays in the underserved communities where they provide care, a new study shows.

However, the study, published this week in Health Affairs, also found that emergency room visits rose dramatically within the HEZs.

Overall, researchers at the Johns Hopkins Bloomberg School of Public Health found that the zones saw a drop of more than 18,000 inpatient stays that generated about $108 million in net savings over four years.

"We see a large cost saving here from a relatively small investment," said study lead author Darrell J. Gaskin, director of the Hopkins Center for Health Disparities Solutions at the Bloomberg School.

Five years ago, Maryland created Health Enterprise Zones in Annapolis/Morris Blum, Capitol Heights, Caroline and Dorchester counties, Greater Lexington Park and West Baltimore, with goals to improve health and reduce unnecessary hospitalizations.

The state brought in primary care physicians and other health workers to improve care access and promote healthier behaviors in the Zones, which had higher rates of Medicaid use, lower-than-average life expectancy and other poverty indicators.

Gaskin says the key to success for the five HEZs, which are led by local health departments or hospital authorities, is to understand the care needs for their particular zone.

In the Annapolis area, for example, the HEZ installed a primary care clinic in a senior citizens' center. In the Lexington Park area, the problem was a lack of reliable transportation to healthcare facilities. So, the HEZ bought vans to transport people to healthcare appointments.

"Each zone tailored their program to meet the needs of their particular population. The state didn't tell them what to do. They just held them responsible for the healthcare outcomes," Gaskin says.

To gauge the success of the HEZs, the Johns Hopkins researchers analyzed state data on hospital inpatient stays, readmissions, and ER visits between 2013—2016. They compared the metrics in 16 zip codes in the HEZs and in 94 zip codes that were not covered but had similar demographics.

The rate of inpatient stays per 1,000 people declined in both populations during the study period—but declined more in the population served by the HEZs.

Over the four-year study period there were 18,562 fewer inpatient stays than would otherwise have been expected. Relative declines were even greater for the chronic conditions, such as diabetes, hypertension and chronic obstructive pulmonary disorder, that the HEZ initiative was specifically meant to reduce.

Unexpectedly, the analysis also linked the HEZs to 40,488 extra ED visits during the study period, but Gaskin says that statistic should be put in context.

"Some of this is emergency physicians not admitting patients, which they normally would have done, because now they're comfortable with sending those patients home," he says.

"Now they know the patient has a care coordinator or primary care provider in that in the community who they can immediately connect that patient with to help them manage their care," he says. "So, what we would have seen in our data as an inpatient stay, instead we see an ED visit."

Gaskin says the 40,488 extra emergency room visits cost $60 million, but the reduction of 18,562 inpatient stays saved $168.4 million, for a net savings of $108.5 million in the HEZ program that cost $15 million over four years.

“We see a large cost saving here from a relatively small investment. ”

John Commins is a content specialist and online news editor for HealthLeaders, a Simplify Compliance brand.


The population health initiative lets local stakeholders identify health needs.

The cost of additional ER visits was more than offset by the reduction in inpatient stays.

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