• Analysis
  • November 5, 2015
  • 28 minutes
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Baltimore paid hospitals to keep patients out of beds – it saved lives

Global budgeting replaced payment-per-procedure and saved money in the process

It sounds like something politicians promise in election campaigns – better healthcare for less money.

But in the troubled state of Maryland, where the National Guard had to be deployed this April to quell rioting after the death of a black man in police custody, better-for-less has already become a reality in hospitals.

This has been achieved largely by changing the way hospitals receive their funding. Previously, hospitals in Maryland were paid per procedure, per visit to the Emergency Room, per overnight stay. Instead they are now given a lump sum – a global budget – with which they have to attain certain outcomes, incentivising hospitals to reduce admissions.

After a year of being implemented across the state, it has saved more than $100 million while driving down hospital readmission rates faster than the national average.

LeanaWen3The success has attracted international attention. But Dr Leana Wen, the 32-year-old City Health Commissioner for Baltimore, told Apolitical that to focus on global budgeting, however successful, misses the most significant shifts at work in Baltimore. Already, she says, an innovative and collaborative culture in public health has enabled numerous solutions to problems such as infant mortality, teen pregnancy and addiction – as well as a staggeringly effective systemic change to hospitals.

And if Wen has her way, this will be only a fraction of what is achieved. ‘I very much believe that we are at a critical juncture, not only in Baltimore, but also the country and around the world when it comes to urban public health. And I intend for Baltimore to be the model of resilience and recovery.’

Such ambition may at first seem wildly optimistic given the city’s challenges. Life expectancy varies by twenty years between neighbourhoods only a few miles away from each other. Wen does not ignore the problems, noting indignantly that ‘In Baltimore a person’s zip code will determine how long they live more than their genetic code.’

But to Wen the scale of the problem also points to the scale of the opportunity. Why do we do what we do in public health? It’s our opportunity to focus on a key civil rights issue. I think that public health is often neglected as a tool for social justice. There are so many disparities, so many inequalities, that bend the arc of justice, and public health is the way to level the playing field.’

It is as hard as it sounds

Wen joined as City Health Commissioner in January 2015, by which time global budgeting for hospitals was already well under way.

The global budget works by changing the incentives for hospital managers. Dr Joshua Sharfstein, who fought to bring in the system as Maryland’s Health Secretary, told NPR: ‘There were incentives built into the old system for volume. If you can only make $2 on a pair of pants, you have to sell a lot of pants.’

Where payment per procedure incentivised hospitals to provide lots of hospital treatments, global budgeting pushes them to treat people before they get sick enough to need hospitalization in the first place. That’s because treating people outside hospital is much cheaper, and any money the hospital has left over from the global budget at the end of the year, it gets to keep.

‘Whereas before, hospitals could really only make money by keeping their beds filled, now they can actually do better if their community is healthier and they’re preventing admissions,’ Sharfstein said. ‘To a certain extent in the United States of America, a healthier community may mean a financial problem for the hospital, but no longer is that the case in Maryland. And that creates a great opportunity for public health.’

Spurred on by global budgeting, and supported by the health department, hospitals have begun to provide increased outpatient care, ensuring that people take their medication and eat properly, as well as creating primary care centres where patients can see doctors without making repeated visits to hospital. They even work with community groups on issues such as housing, to prevent health problems even earlier in the causal chain.

Anyone reading closely, however, will have realised that there is a far less pleasant potential incentive – to reduce the coverage and quality of care. And global budgeting has been experimented with before, primarily by the World Bank in post-communist countries like Romania, Albania and Kosovo.

Those countries had been locked into a highly rigid system where set amounts of funding were allocated to specific types of treatment. As the British academic Bob Dredge, who works with the World Bank, explains, ‘It’s as if the Dredge household decides to spend £100 a month on heating and £60 a month on food, but carries on spending £100 a month on heating even in summer, and only £60 a month on food even if we’re starving.’

So now those countries that switched to global budgeting have also added safeguards to prevent the incentives operating in the wrong way. Those can be either additional budgetary incentives (where the situation gets truly complex) or separate monitoring of performance, which is what happens in Maryland.

As Dredge emphasises, the different models are suited to different social and economic circumstances. A ‘payment by results’ model, for example, can significantly improve care when money is readily available (as happened in the UK before the financial crisis), but is ill-suited to times when money is tight, because it can push funding away from areas of elective care, such as cancer, and care for the elderly.

In Baltimore, funding is tight. And global budgeting clearly is clearly no panacea. So to understand its success, we have to look more closely at the remarkable culture of innovation driven by Wen.

Your health is your life

A Chinese immigrant, Wen grew up in a rough neighbourhood in Los Angeles with classmates both ‘victims of injury and perpetrators of violence’. Acutely aware of how racism and poverty damage society, she became an ER doctor because she wanted to work in a place where no one was turned away due to prejudice or an inability to pay.

But she soon became frustrated. ‘It’s in the ER that I saw the limitations of what we can do [as doctors]. I remember seeing a 17-year-old who had five gunshot wounds, three in the chest and two in the abdomen. That day, he was dying—but the year before, he’d come in with hand injuries, facial injuries, overdoses from various substances, sometimes with conditions related to homelessness. He was truant from school. He was a foster child with a history of abuse in his family, and the question is, what could we have done to intervene before this?’

With patients such as this, Wen became preoccupied with the question of how to tackle the socio-economic issues and inequality that drives people into the Trauma Center. She gives the example of infant mortality, a model of imaginative early intervention that predated her and global budgeting.

In 2008, Baltimore had the fourth worst infant mortality rate in the country. ‘It was horrible. Our babies were dying at the same rate as in countries in the middle of civil war. In a country that is one of the wealthiest in the world.

LeanaWen‘And if you asked people at the time what the reason was, people would say: lack of resources. But the Health department took a look and said, “Actually, there are a lot of resources out there. The problem is that they’re siloed, that there are hundreds of groups working on infant mortality and care for pregnant women in some way.” They may have been helping the patients in front of them, but it was not working to move the needle on a population level.’

By bringing together more than a hundred partners with an interest in this area, such as hospitals, clinics, academics, fraternities, neighbourhood associations – something that itself took years – and committing them all to a unified strategy, Baltimore has driven its infant mortality down to the lowest rate it has ever had. It has also brought about a 50% – as Dr Wen puts it excitedly, ‘that’s five-zero’ – reduction in sleep-related deaths, and an ‘unprecedented’ 32% decrease in teen birth rates.

Wen sees the B’More Healthy Babies programme, while not a programme she invented, as one of the best tools to drive the change she wants. ‘We need to tell this story everywhere that we go. It illustrates that it is possible for us to make change. The best tool that we have to fight pessimism is a demonstration of success.’

So building on the success of the programme, Wen is now applying the same multi-stakeholder approach to a more ambitious programme dealing with youth health and wellness. She isolates three principles essential to the success of the Healthy Babies programme, which are now being applied to the wider area of youth health:

  1. Collective impact: Bringing together multiple groups is both essential and hard, notes Wen. It requires trust in the health department as ‘a neutral convener. We don’t have a dog in the fight. Don’t favour one over the other. [We ask] everyone to lay down their weapons at the same time.’ It also requires delivering on the expectation that Wen and her colleagues can bring in resources benefitting those they convene.
  2. Engaging patients: Sincere community involvement is required at every stage. ‘So often, getting the involvement of patients and community members is seen as a check-box. It’s not genuine or sustained. What we do is we have youth at the table all along the way. We have an advisory group that we consult not only for advice but for decisions. We engage the community in letting us know, What are the questions we should be asking? We come back to them with our data, we ask them: Are we on the right track? Do you think that this makes sense? What other language do you think we need? That’s so necessary because the last thing that Baltimore, or any community, needs is for us to be telling them top-down what’s good for them. We need to be committing to engage them as equal partners every step of the way.’
  3. Using the most credible messengers: ‘If I go and I teach a new mom about the ABCs of things… please. They’ll see me as a doctor, which I am, but someone who doesn’t really understand their culture. And they might not tell me why they don’t want to use breastmilk and why they want their babies to sleep next to them instead of in a crib.’ The most striking use of credible messengers the Safe Streets programme which hires ex-offenders to walk the streets and mediate conflicts where and when they occur. Covering just over 1.5 square miles, these outreach workers mediated 880 conflicts last year, 80% of which were deemed to be likely or very likely to result in gun violence. ‘These are individuals who are the most credible because they come from the communities they serve,’ Wen says.

Disaster as a chance for systemic solutions

The new youth health and wellbeing programme, now scheduled to be launched in six months, was delayed after Freddie Grey, a 25-year-old black man, was illegally arrested and shackled in the back of a police van, where he suffered injuries that killed him. Baltimore exploded in protest. Buildings and cars were torched, police officers attacked, hundreds of people arrested. Eventually, a state of emergency was declared and thousands of National Guard troops were deployed to subdue the city.

Wen talks sadly of the incident, but quickly brightens as she tells how many of her staff, whom she’d told to stay out of harm’s way, argued with her instructions, and carried on seeing their charges, often in the most dangerous areas. ‘I’ve been continuously amazed by the dedication of people in the department. During the unrest, people refused to go home.

‘[Then] we needed to recruit people to be there 24/7 and we had no difficulty with that recruitment, because people are seeing this happen in our communities. It’s not up to us to get people to come to work, because this is the community that they come from, the community they’re passionate about serving. That’s one of the great things about our work, that the people are extremely committed on every level.’

She then explains how the delay for the youth wellness plan was intentional. We ‘cannot treat the city in the same way for youth violence prevention after April’. For her, some good can come from the unrest in April: ‘[It was] a real opportunity for us to focus on youth violence in a more deliberate way.’ They started by improving the city’s mental health provision, which included building a mental health and trauma recovery centre and setting up a 24/7 crisis response line. To make the city ‘trauma informed’, Wen has enlisted the help of every frontline agency in training employees on understanding the effects of trauma on the people they encounter.

Public Leadership 2.0

LeanaWen2Such rapid adoption of new strategies, and the adaption of the youth health and wellness programme following Freddie Grey’s death, say much about Wen’s approach to public sector leadership. So too does the fact that, even with her gruelling schedule, she was happy to schedule a call with Apolitical at 6.30am.

Despite the hour, she gets her message across with complete lucidity. When we point out her consistent ability to discuss complex problems and ideas in terms of simple steps, frameworks and examples, she laughs: ‘It’s about meeting people where they are. I think that comes from my days as a doctor. If I can’t explain things to my patients in a way that will result in them taking action, it could compromise their life.’ She says the same is true in administration. ‘If it’s a policy maker [I’m talking to], we have to make clear why it’s a good idea, what the harm is if we don’t do it this way, and how it benefits them and their constituents.’

In this one response lie three distinctive and recurring themes in Wen’s approach:

1. Be optimistic – especially about complexity

Many public sector leaders – indeed many private sector leaders – wring their hands when discussing complexity. Wen treats complexity and the systemic nature of things as an opportunity: a way to expand influence and reach and to involve more people and agencies in bigger, bolder solutions. ‘We need to relate our health message to everything that may be important to that other person. So if there’s a legislator whose focus is education, I’m not going to be talking to him about just health, I’m going to be talking about health as it relates to education. If a child can’t see, how can they learn? And about how programmes like early childhood education are a public health intervention. My goal is for every legislator, no matter what they care about, to say, “Oh, well of course I have to talk to the City Health Commissioner and get their view.” Because everything that they do, whether it’s employment or policing or housing or whatever, they need to be talking to me. And I need to make myself and the Health Department indispensable to the work of all the other agencies.’

2. To attract great people, offer great purpose

Contrary to the popular narrative, Wen does not doubt that local government can and does attract excellent people: ‘One of the great pleasures of serving in local government is you are working in your communities. Dozens of my employees are there for more than 40 years. Others have moved from other cities around the U.S. and the world to join our team’ On the challenges, she remarks dryly: ‘Whenever I tell people I work in local government, they roll their eyes. I’m an ER doctor, and I’ve never worked in a setting that’s as fast-paced as this.’

In building her team, she has recruited top people from local government, national government and the private sector. Asked what has helped her attract such experienced individuals, with so many options, she says, ‘I’m not shy in recruitment efforts to say what my vision is.’ That vision is for Baltimore to be a model of health innovation and for social change. But given the problems the city faces, not everyone is up to the pace such a vision requires. So Wen has every candidate be interviewed by all her senior staff and then shadow her for a day. ‘Many pull out, saying this is not for me.’ Those that stay do so because they believe they can use public health to transform their embattled community, and set an example for the whole country and beyond.

3. Say things more – and say things differently

Wen stresses that an essential component of her successes in Baltimore is moving away from the traditional ethos of the invisible public servant. She considers herself both ‘chief publicist’ and ‘chief fundraiser’ for the Health Department, maintaining a prominent public profile, writing regularly for the Baltimore Sun newspaper and making regular TV appearances, saying: ‘We have to show why we do what we do.

IMG_0661(1)‘[The traditional idea is] that unless we are politicians, who are certainly better at talking about themselves, everyone else is expected to take a side role and not be the front person. But I think this is a mistake, because how can we justify funding, how can we be relevant in advocacy, if we’re not there all the time, speaking about our successes? We can’t just be present when we need something or when something goes wrong. We have to talk about what we do and why we do it all the time.’

She also offers a note of caution, saying that people sometimes mistake her advocacy for self-promotion or political ambition. ‘It’s not political,’ she insists. ‘I have to keep on making the point that what we’re doing is policy, advocacy, based on data, involving the community, and always – always –serving the residents of Baltimore.

‘I want, not just want, I intend for Baltimore to be the model for overdose prevention and addiction recovery, for youth violence prevention and youth health promotion, for population health –and I hope that others will see whatever they do in that same light. That they have an opportunity not only in their cities to make a big difference, but also around the country and around the world, to help others and share their lessons, too.’


  1. ‘Over-communicate. Over-communicate. Over-communicate. You may think you’re saying the same thing over and over again, but there’s no such thing as telling that story too many times. The fear is not over- but under-communication. Data are important but you need stories tied to them.’
  2. Pick two issues to talk about again and again. No one will remember your 10 point plan. In Wen’s case those issues are youth health and wellness, and mental trauma and addiction. These are, in her words, the most critical issues and can be tied to all other issues facing the city.
  3. Demonstrate short-term success to get support for long-term goals. Baltimore is working on reducing drug addiction, a project of decades. But in the meantime, they’ve improved saving lives from overdose by training more than 5,000 people to use an antidote drug.
  4. Make your department unavoidable for other departments, so that people working in education, or employment or wherever will think about the knock-on effects for what you’re doing, and call you.
  5. Follow through on your promises. ‘People are extremely willing to work together, but what often happens is a lack of follow-through. A lot of people have good intentions, but one lesson is how much you can impress people by simply following through on what you said you were going to do. Demonstrate your value, and your agency will quickly become indispensable.’

(Photo credit: Flickr/Toby Bradbury)


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