Maryland’s 50-year experiment with the hospital rate-setting system stands out as a unique and long-lasting initiative – but has it accomplished its goal of reducing health care costs? This rate-setting scheme has been sustained due to additional Medicare funds supplementing the model, an additional $20.6 billion through 2017. It’s also inspired CMS’s All-Payer Health Equity Approaches and Development (or AHEAD) pilot program. 

The Maryland model has come under scrutiny with a paper published in HFM Magazine entitled “Maryland’s example is no solution to healthcare’s true crises.” It finds that the state’s health costs remain higher than the national average, even though the system was designed to reduce hospital and overall health care costs.

Our guest is the author of the paper and president of Health Futures, Inc. - Jeff Goldsmith. In this episode, we'll discuss the history of the Maryland model, the findings of his paper, the impact on hospitals and health care costs, and propose alternative solutions for reducing costs.

Topics discussed include:

• Implications for the state – findings from Goldsmith’s paper
• Emulating the scheme – feasibility of replicating the Maryland model elsewhere and cautionary notes for policymakers
• Refocusing health care goals – what solutions to access and cost should CMS be considering instead?
• What’s next – the future for hospitals 

More: 

Jeff Goldsmith is the President of Health Futures, Inc. He speaks on the future of health care- covering topics like technology, economics, leadership health care trends and policy analysis. Goldsmith is also a strategist and mentor to leaders in the health care industry.  He has also taught at several prestigious universities and worked in the private sector as a consultant.