Pay attention to Maryland

We pay close attention to Massachusetts because it implemented an ACA-like coverage expansion law well before the ACA. It’s naive to think what stems from the Massachusetts law will transpire in every state, but Massachusetts at least provides a data point in the domain of the possible.

For a similar reason, we ought to pay close attention to Maryland. It has implemented

[p]ilot programs involving global budgets at the state’s rural hospitals and a statewide program for other hospitals that essentially provides a single level of payment for any hospital admission with no additional payment for any readmission within 30 days of discharge regardless of the reason.

We can’t know the future, but it could include a similar program in many other states, if not nationally under Medicare. (ACOs are not that different.) If so, Maryland would be an important bellwether for payment reform, just as Massachusetts is for insurance market reform.

In JAMA Internal Medicine, Joshua Sharfstein, Donna Kinzer, and John Colmers continued:

Every Maryland hospital now has a form of a global budget for hospital services covering at least all state residents, who represent approximately 9 of 10 patients. […] Although patients and payers still receive bills for services that they use, unless there are drastic year-to-year changes, the total revenues during a year are the amount budgeted and approved, no matter how many admissions, magnetic resonance images, or outpatient visits.

I didn’t follow the run-up to this law, but it couldn’t have been politically easy. However, the extremely difficult was probably made possible because the state transitioned from a unique all-payer system. How ever it got to its global payment system, the consequences of it are important.

Pay attention to Maryland.



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