Vox, January 22, 2020: The answer to America’s health care cost problem might be in Maryland
Health care costs in the United States are double the per capita average in a comparable developed nation, yet outcomes are still worse. People die younger. Infant mortality rates are higher.
One reason for all this: perverse incentives for health care providers. In 49 of the 50 states, more sick patients in hospital beds means more revenue. And because the government negotiates lower rates for Medicaid and Medicare, patients on those plans are less desirable than privately insured patients, who can be charged more to boost hospitals’ bottom line.
Maryland is the exception. Hospitals’ budgets are fixed, as are the rates they can charge for procedures. Once they hit their revenue caps, they don’t make more money on having patients in the hospital — and there is a carrot-and-stick system to ensure hospitals don’t exceed those caps. “What this is doing is incentivizing hospitals to do the right thing,” Bob Atlas, the CEO of the Maryland Hospital Association, said.
