Salisbury Daily Times
February 3, 2014


The Maryland Citizens’ Health Initiative applauds the state’s unique Medicare waiver under the Affordable Care Act. Implemented wisely, it will favor consumers by improving health care quality while slowing the growth of health care costs.

Past hospital payments were based on volume of services provided. Too often, this system hurt consumers. For example, a patient discharged from the hospital without clear instructions for self-care might suffer a relapse and wind up back in the hospital. Or sloppy infection control might sicken patients and lengthen their hospital stays. When this occurred, the careless hospital would not be penalized, but rather rewarded with higher reimbursement.

Under Maryland’s waiver, the new payment system reverses those incentives. Hospitals must live within overall budgets based on community need. Revolving-door re-admissions and practices that make patients sick will now take a toll on a hospital’s bottom line. Powerful financial incentives should make these unhealthy practices a vanishing memory.

For these new incentives to succeed, hospitals must be encouraged to reach beyond their walls to collaborate with other health providers and community groups. Dr. Josh Sharfstein, secretary of Maryland’s Department of Health and Mental Hygiene, recently gave an example of how this new approach can work. A rural hospital began investing in community-based asthma prevention for children once it started operating under the kind of population-based budget envisioned by the waiver. Before this, the hospital lacked financial incentive to keep children healthy and out of the hospital.

Unfortunately, a hospital may also gain under the waiver by encouraging costly patients to go elsewhere, by skimping on care or by discharging patients rapidly to skilled nursing facilities. A hospital could thus stay within its budget by endangering patients and shifting costs to other providers. To paraphrase ancient wisdom, there ain’t no such thing as a risk-free hospital financing system. Just as our old system created the risk of too much care, our new system may encourage too little care. Rigorous monitoring is needed. We are pleased that the Maryland Hospital Association has committed to work with state officials and consumer advocates to ensure our new system will improve rather than harm patient health.

Our state is clearly headed down the right road, but much hard work is required to provide a smooth ride and reach the desired destination. We look forward to collaborating with consumers, providers, insurers and officials throughout Maryland as we make this journey together.

Last modified: February 3, 2014