How the "Maryland Model" impacts your hospital visit

Posted at 6:09 PM, Jul 09, 2018

Hospitals in Maryland will continue getting paid through the all-payer health care model, also called the "Maryland Model."

On Monday, Governor Larry Hogan signed a new five-year agreement with the federal government. Hogan said the system emphasizes quality of care over quantity.

The "Maryland Model" determines how hospitals are paid and how much.

Since the 70's, the state has had an all-payer system where all patients, regardless of insurance, are billed the same amount for a service. In 2014, a cap was implemented setting a limit on how much a hospital would be reimbursed for those patients, regardless of how many they treat.

“The thought is if hospitals received a fixed amount of money for all patients they serve in a given year, they have incentives to be more efficient, to avoid hospitalizations that may be unnecessary and to improve primary care for patients in the state,” said Eric Roberts, an assistant professor of health policy and management at the University of Pittsburgh.

Roberts and a team of researchers set out to test that hypothesis. In a report published earlier this year, they found some improvements, reductions in re-admissions, but not in emergency department visits.

And according to data collected by the Centers for Medicare & Medicaid Services, Maryland's emergency department wait time is at 50 minutes, the longest in the nation. Puerto Rico is second with 44 minutes, D.C. and Delaware are tied for third with a 38-minute wait.

While the problem hasn't dramatically improved in the state, the hope is that it will under this program.

“Previously, when hospitals were billing on a fee-for-service basis, they got paid each time you went to the ED so they didn't have an incentive to keep patients out of the ED or in any hospital facility, now they do,” said Roberts.

The idea is to connect you with the right provider, the right medications, and look at your overall care plan, so it may take a little more time in the ED, but it should help eliminate frequent fliers or repeat visits.

“So, overtime, the hope is that consumers will experience better care coordination and that hospitals and physicians will be further incentivized to treat patients proactively in settings in the community at a lower cost,” Roberts said.

And while there are projected cost-savings, around $1 billion over five years, there are not for patients, at least not right now.

“If providers are becoming more efficient and saving money, your premiums won't go up as much next year. So in the long term, there could be savings that patients realize. It's not going to be lower premiums in an absolute sense but it's a slower rate of growth in their health insurance premiums,” said Roberts.

Roberts said the program's overall success is still yet to be determined. It takes time to connect people in the ER with the right people in the community, but the point of the program is to foster this kind of collaboration.

And if it works, we will hopefully see improvements in efficiency and quality that makes health care more affordable.