By Robert Laszewski

Every week, I get an email from the Maryland Health Connection––the state run health insurance exchange.
Maryland is one of a minority of states that are building their own Affordable Care Act (“ObamaCare”) exchange.

You can go to their site and sign up for these weekly updates.

Let me suggest that Maryland is an example of what an on-track and well organized effort looks like for any exchange hoping to be ready to enroll people on October 1––and ensure that they will be covered should they walk into a doctor’s office on January 1, 2014.

Maryland is simply ticking through all of the key milestones they must meet. The latest release reviewed its efforts to launch the connector program (those who will assist people in signing up), the status of the carrier filings (Maryland Blue Cross has filed for an average increase of 25% for individual coverage warning young people could pay as much as 150% more), the timelines for carrier submissions of coverage packages, and they outlined their third party administration program to be able to launch the small business choice (SHOP) option––unlike the federal exchange Maryland will have the SHOP option.

Continue reading “A Health Insurance Exchange That Won’t Be a “Train Wreck””

By MERRILL GOOZNER

President Obama’s health care reform bill is filled with experiments on how to hold down health care costs.  There will be bundled payments for episodes of care and extra payments for raising quality standards. It calls for the reorganization of hospitals and physician practices into “accountable care organizations,”  which will share in savings if their costs fall below previous levels.

What’s not in the legislation is old-fashioned hospital rate regulation, which only one state in the nation uses. The latest results from Maryland suggest rate regulation works.

The state’s Health Services Cost Review Commission (HSCRC) announced earlier this week that average costs per stay at Maryland’s 51 hospitals rose just 2 percent in 2010, significantly less than the 3 percent national average. Since 1977, when rate regulation went into effect, hospitals costs in Maryland have experienced the lowest cumulative growth rate of any state in the nation, going from 26 percent above the national average to almost exactly average, according to data contained in HSCRC’s latest annual report .

Maryland, which had the sixth highest hospitalization costs among 50 states and the District of Columbia in the mid-1970s, today ranks squarely in the middle of the pack. Its $10,983 in average costs per equivalent admission in 2010 was slightly less than the $10,996 national average.

Continue reading “Maryland Regulators Holding Hospital Costs in Check”

by MAGGIE MAHAR

Massachusetts has succeeded in providing health care insurance for all but 2.6% of its citizens.

Yet the Commonwealth still struggles to make that coverage affordable. Health care inflation is driving Massachusetts’ system toward a cliff.  Total outlays for medical services and products are climbing 8 percent faster than the state’s economy.  Unless something is done to rein in the cost of care, health care spending in Massachusetts is projected to nearly double over the next 10 years, hitting $123 billion in 2020. State officials know they must find a way to put a lid on spending so that it grows no faster than the state’s gross domestic product.

But how?

With that question in mind, The Massachusetts Division of Health Care and Policy (DHCFP) contracted with the RAND Corporation to develop a menu of cost containment strategies and options.  In  September RAND came back with a report that recommended 12 strategies for reducing health care bills. Continue reading “How Maryland “Broke the Curve”: A Solution For Massachusetts?”

By MAGGIE MAHAR

While health care reformers argue about what it would take to “break the curve” of health care inflation, the state of Maryland has done it, at least when it comes to hospital spending.

In 1977, Maryland decided that, rather than leaving prices to the vagaries of a marketplace where insurers and hospitals negotiate behind closed doors, it would delegate the task of setting reimbursement rates for acute-care hospitals to an independent agency, the Maryland Health Services Cost Review Commission.

When setting rates, the Commission takes into account differences in labor markets and how much a hospital pays in wages; the amount of charity care the hospital does; and whether it treats a large number of severely ill patients. For example, the Commission sets the price of an overnight stay at St. Joseph Medical Center in suburban Towson  at $984,  while letting  Johns Hopkins, in Baltimore Maryland, charge  $1,555. For a basic chest X-ray, St. Joseph’s asks  $81 and Hopkins’ is allowd to  charge  $155. The differences reflect Hopkins’s higher costs as a teaching hospital and the fact that it cares for generally sicker patients. Continue reading “Massachusetts’ Problem and Maryland’s Solution”