Making Healthcare Convenient

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Data Shows Maryland’s Health Enterprise Zones Reduce Cost of Care 

There’s plenty of data to indicate Maryland’s Health Enterprise Zones (HEZ) have been successful in their goal of reducing health disparities for racial and ethnic minorities and reducing healthcare costs in the state.

A study by the Johns Hopkins Bloomberg School of Public Health released late last year has concluded the HEZ initiative saved $93 million in healthcare costs and accounted for 18,000 fewer hospital stays over four years.

Emergency visits did boom in the five state health Enterprise Zones during the 2013 through 2016 study period, with 40,000 extra ER visits in those five zones, but even that may have been a positive result of the HEZ initiative, according to Darrell J. Gaskin, PhD, the William C. and Nancy F. Richardson Professor in Health Policy in the Department of Health Policy and Management and director of the Hopkins Center for Health Disparities Solutions at the Bloomberg School and lead author of the study.

“We think that many of these patients visiting emergency rooms normally would have been admitted to hospitals, but in the zones, with their community-based resources, the hospitals may have been better able to send those patients home to rely on those community resources instead of admitting them,” Gaskin says.

“The 40,488 extra ER visits cost insurers and patients an estimated $59.9 million,” according to the Bloomberg School. “The reduction of 18,562 inpatient stays saved an estimated $168.4 million for a net savings of $108.5 million, against the $15.1 million cost of the zones initiative during the same period.”

“We see a large cost saving here from a relatively small investment,” says Gaskin, who advocated more HEZ zones be established in the state.

The study, “The Maryland Health Enterprise Zone Initiative Reduced Hospital Cost and Utilization in Underserved Communities,” was written by Gaskin, Roza Vazin, Rachael McCleary and Roland J. Thorpe, with funding provided by the Maryland Department of Health.

It notes Maryland implemented the HEZ initiative in 2013, “to improve access to healthcare and health outcomes in underserved communities and reduce healthcare costs and avoidable hospital admissions and readmissions. In each community the HEZ initiative was a collaboration between the local health department or hospital and community-based organizations.

“The initiative was designed to attract primary care providers to underserved communities and support community efforts to improve health behaviors. It deployed community health workers and provided behavioral healthcare, dental services, health education and school-based health services.”

Gaskin and his colleagues compared trends in admissions in ER visits and hospital admissions for people in 16 zip codes covered by HEZs and in 94 zip codes that were not covered but met the criteria for the zones.

The program was authorized by the Maryland Health Improvement and Disparities Reduction Act of 2012 with an initial budget of $4 million per year for each of four years to establish the zones. It was jointly administered by the Community Health Resources Commission (CHRC) and Maryland Department of Health and Mental Hygiene (DHMH).

The program was considered complementary to the national Affordable Care Act (ACA) in its focus on reducing healthcare costs by reducing re-admissions to hospitals, which was also a big part of the ACA.

A pre-zones analysis by the state’s Health Disparities Work Group, “Focused on ways to address the root causes of health disparities, as evidenced by higher rates of diseases and illnesses, such as asthma, diabetes and hypertension.

“The Work Group developed recommendations, including the creation of HEZ to saturate underserved communities with primary care providers and other essential healthcare services.”

According to the Maryland Department of Health, the zones were designed so each would be a contiguous geographic area, have documented evidence of health disparities, economic disadvantage and poor health outcomes, and would be small enough to allow incentives to have a significant impact but large enough to track data, with populations of at least 5,000.

Each HEZ had to demonstrate economic disadvantage either through its Medicaid enrollment rate or Women Infants Children participation rate. And it had to demonstrate poor health outcomes through a lower life expectancy or percentage of low birth weight infants.

Maura Dwyer, HEZ program director at the Maryland Department of Health, noted the HEZ enabling legislation provided these incentives to attract new healthcare providers:

  • State income tax credits;
  • Hiring tax credits;
  • Grants for program support, equipment purchase or lease; and
  • Loan repayment assistance programs.

She also noted practitioners had to have cultural competency training, accept Medicaid and uninsured patients, and have a letter of support to access the tax credits.

The five zones designated were Annapolis/Morris Blum, Capitol Heights, Caroline and Dorchester counties, Greater Lexington Park and West Baltimore. Though the original four-year program, overseen by the Maryland Department of Health, has sunset, the individual zones are continuing the initiative.

Data from the individual zones also indicates considerable success in meeting HEZ goals.

Maha Sampath, who directed the West Baltimore effort and now is chief of staff at Bon Secours Baltimore Health System, gave an extensive report on that zone’s results in 2017.

She noted that in the West Baltimore zone, African Americans made up 76 percent of 86,000 residents in four zip codes with an average median income of $21,768. The zone also had, “The highest disease burden and worst indicators of social determinants of health than any other community in Maryland.” Patients were three times as likely to have cardiovascular disease as those in any area of the state. Cardiovascular disease and associated risk factors, like diabetes and hypertension, were targeted by the zone.

Some of the metrics Sampath quoted were that the effort provided care coordination services to 1,194 HEZ residents as of March 2017 with an average readmission rate of 14 percent for high utilizers, compared to a baseline of 17 percent and a prior year rate of 15 percent. “Pre/Post analysis shows reduction in emergency department visits and hospital charges and success in connecting high utilizers to a community health worker and a primary care provider.”

One key to success was getting more healthcare providers in the zone. West Baltimore used $170,000 in tax credits to recruit 25 providers and put on four Community Health Worker training sessions.

It offered free courses on nutrition, physical activity, smoking cessation, and stress relief, provided care coordination and community health outreach services at public and senior housing sites, and, in conjunction with partners, sponsored community outreach activities focused on health and wellness, according to the presentation. Sixteen grants, totaling $130,000, were awarded to those community partners. More than 100 health career scholarships also were awarded, for $338,000.

One scholarship recipient, Rodney Butler, says, “I am currently in school to become a respiratory therapist. The curriculum and the journey so far have been tasking, tedious and challenging but worth every minute. While attending college, I am able to not only help myself but inspire my children to always seek higher education and strive to be as productive as possible.”

Sampath presented readmission rate data that showed a big reduction for West Baltimore. Between 2012 and 2015, the zone achieved a 14.8 per thousand reduction in unplanned readmission rates, from 37.3 per thousand to 22.5. That was more than any of the other HEZs and the state as a whole.

State stats for the Annapolis zone show total patient visits throughout this HEZ increased from 433 in the fourth quarter of 2013 to 489 in the first quarter of 2015; the number of patients who received primary diabetes care went up to 95 from 33; and the total number of unduplicated patients was up from 297 to 348.

Darrell J. Gaskin, Lead Author, “The Maryland Health Enterprise Zone Initiative Reduced Hospital Cost and Utilization in Underserved Communities,” report by the Johns Hopkins Bloomberg School of Public Health.

Maha Sampath, Chief of Staff at Bon Secours Baltimore Health System, presentation on the West Baltimore health enterprise zone, 2017.

Mark Fogarty has covered housing and mortgages for more than 30 years. A former editor at National Mortgage News, he has written extensively about tax credits.