Maryland Tries to Curb Hospital Costs
| By Christine Vestal, Stateline.org | |
| McClatchy-Tribune Information Services |
The federal government earlier this month approved a first-of-its-kind regulatory scheme in
The hope is that hospitals will, for example, hire doctors to work in nearby nursing homes to prevent chronically ill residents from ending up in the emergency room. Hospitals also are expected to collaborate with independent physicians in their communities to help chronically ill patients manage their diseases, thereby avoiding hospitalization.
But even its biggest proponents admit the new financial scheme will be tough to pull off. "This is the right thing to do for our patients and communities," said
Standard Pricing
Other states, including
"We have this unique payment system and tools that other states just don't have," said
A key ingredient of the state's regulatory scheme is a 36-year-old waiver from the federal government that allows
If the state succeeds, it can continue setting its own
Beyond the ACA
The Affordable Care Act promotes the same overall goals as
"It's the ultimate in population-based medicine," said
Under the plan, each
One concern is that the new financial incentives could induce hospitals to make it harder for people to be admitted or stop offering certain services that result in costly admissions. The new plan includes quality standards and other safeguards to ensure that doesn't happen. Hospitals are so closely regulated in
For the five-year waiver period,
Participation in the program is not mandatory, but most hospital CEOs in the state have vowed to take the leap, in part because a small-scale test of the model – called Total Patient Revenue System – has proven successful over the past three years in 10 of
Sharfstein says the difference is noticeable when you walk into
Since
In the next few weeks, hospitals will have to declare whether they're in or out. If a hospital chooses not to adopt the new "global budget" scheme, its per patient costs will be capped, as in the past, and its growth will also be limited. If revenues exceed historical levels, the state will dock future profits by lowering the hospital's allowable per patient cost. Some hospitals may choose to transition into the new model over the five-year period, Coyle said.
To give hospitals an added boost, Democratic Gov.
The Boldest Plan
Health policy experts describe
But some are skeptical. "It's a big risk," said
Health policy expert
In
Hospitals are also expected to collaborate with other health care providers, including community health clinics and independent physicians. "It's all about building relationships," said Coyle. "We need to better understand patients' care paths, which go well beyond the walls of the hospital."
As revolutionary as it is,
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