Reviews | Why Medical Bills May Be Lower in Maryland

The rate was more generous than the usual Medicare payment, which (in theory at least) is calculated to allow hospitals to provide high-quality care. Hospitals have also secured funds to train doctors-in-training and care for the uninsured – services that previously could not be paid for.

Over the following decades, however, hospitals managed to circumvent price controls by simply ordering more hospital visits and tests. Expenses were increasing. Maryland risked losing the federal waiver that had long supported its system. In addition, under the terms of the waiver, hospitals in Maryland risked paying a hefty fine to the federal government for the excessive growth in the cost per patient.

That’s why, in 2014, the state worked with the federal government’s Centers for Medicare and Medicaid Services to bring in the comprehensive cap and budget system in place today. Dr Joshua Sharfstein, who was Secretary of State for Health and Mental Hygiene, met with skeptical hospital administrators to “sell the concept” as he described it, assuring them that hospitals would get always have a reasonable income while obtaining new opportunities to improve the health of their communities with money to invest in preventive services.

Studies show that the curriculum, which was further revised in 2019, in general work reduce costs and generate savings in $ 365 million for Medicare in 2019 and over $ 1 billion in the previous four years. Additionally, working on a fixed budget has prompted hospitals to keep patients away, resulting in programs like better outpatient care. efforts to manage chronic disease and put doctors in residences for the elderly to keep residents out of hospitals through on-site care.

Implementing this type of plan may be politically impractical statewide in other places today, given the much greater power now of hospital business groups and large consolidated hospital networks. “Where hospitals are making money by hand, it’s hard to change,” said Dr Sharfstein. “But where hospitals face economic pressures, there is much more openness to financial stability and the opportunity to promote community health.”

Dr Sharfstein believes Maryland’s approach may be particularly appealing to cash-strapped rural and urban hospitals that primarily treat people on Medicaid and the uninsured.

Although Maryland is an oddity in the United States (the few other states that tried to control prices in the 1970s abandoned the experience a long time ago), many countries successfully use pricing guidelines and budget limits to control medical spending. Among them, Germany, whose health system is otherwise similar to that of the United States, with several insurers. A landmark 1994 to study a comparison of international efforts has shown that the German system, for example, may be more stingy in providing expensive or optional care.

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