But after saving an estimated $45 billion for consumers over four decades, the system is in danger of running aground. Hospital expenses have risen so relentlessly in recent years that the original price controls now appear unsustainable...
But critics say the near-collapse of the state’s old system proves the perils of heavy-handed regulations...
“Hospital rate-setting clearly didn’t succeed at meaningfully slowing costs down,” said Joe Antos, who served eight years on the Maryland board that set rates...
Over the past several years, Maryland’s system began to unravel. Hospitals saw their expenses soar, and the cost controls proved too inflexible to handle the rise...
So Maryland officials came up with a new approach. On top of setting rates for individual procedures, they are proposing a cap on the growth of the total amount the hospital system spends per person in the state. The plan also allows hospitals to charge higher prices if they adopt preventive-care methods that improve patient health and reduce repeat visits, said Maryland’s health secretary, Joshua Sharfstein...
Hospitals say the plan, if approved, could be onerous, hurting the financial health of the $15 billion hospital industry that employs nearly 100,000 people in Maryland...
John M. Colmers, who chairs Maryland’s Health Services Cost Review Commission and was a key architect of the proposal, acknowledged that the proposal might be “a challenge” for hospitals. Colmers is also a top vice president at Johns Hopkins Medicine in Baltimore...
