Health Economics

Paper, Order, or Assignment Requirements

 

***Find and discuss other states that have attempted “the all payer model” to reduce healthcare cost and provide future recommendation. The analysis should be about 2 pages.***

Health Care Costs: What Is Maryland Doing to Get It Right

Increasing costs and growth in health care is of nationwide concern. Physicians and hospital administrators define health care costs as the money used on the resources needed to care for the patients and their costs of production (Adampoulous, 2014). The main factors leading to higher costs in health care are the expensive technologies and procedures, physicians, facility and drug costs, fragmented and uncoordinated care, lack of cost consideration from patients, service fee, unhealthy behaviors, high administrative costs, provider consolidation and finally expensive end-of-life care (Murray, 2009). In The Complex Relationship between Cost and Quality in U.S. Health care (Burke, 2014) describes·5 steps to take in order to cut down costs: have physicians and clinicians be responsible for making payment decisions, construct payment models with insurance companies, fund comparative effective research that will help develop national guidelines, develop standards for measuring overutilization of medical goods and services and have a plan B in place to catch those that fall through as waste.

Maryland has taken the lead in implementing initiatives to reduce cost in their healthcare system without compromising quality in the care that their patients receive. In terms of payment transaction between patients, government, health insurance, and medical care delivery, organizations including physicians and hospitals, Maryland currently runs the country’s only all-payer hospital rate setting system, under which facilities in the state are paid the same amount by all government and private health insurers (Brown, 2009). Usually, hospitals negotiate fees with each health insurer individually including the federal government. The fees are based on the services provided and vary from insurer to insurer. The more procedures, the more fees. All-payer system eliminates price competition between hospitals, while leading them to divert high-cost patients to alternative settings where prices remains unregulated ( Rajkumar et al, 2014).  In January 2014, Maryland and Centers for Medicare and Medicaid Services (CMS) announced a new initiative meant to modernize the system by promoting value instead of volume through various efforts of health information exchange.

Our paper aims to discuss the challenges the nation faces as the cost of healthcare continues to rise and what steps Maryland is taking to assist its residents with obtaining quality care regardless of ability to pay. Although, the system  that Maryland has in place is not without its challenges, it is progressing towards methods to improve the quality of care for all. This paper will also give us understanding, as Maryland residents, of healthcare cost issues that directly affect us.

References:

Adampoulous, Helen (2014). Has Maryland found a solution to the U.S. healthcare cost crisis. Financial Management, Becker’s HospitalCFO.

Burke, L. Ryan, M. A. (2014). The Complex Relationship between Cost and Quality in U.S. Health care. AMA Journal of Ethics.Virtual Mentor. Volume 16, Number 2: 124-130.

Brown, S. L. (2009). All-Payer Hospital Rate-Setting in Maryland. Public Performance & Management Review.

Murray, Robert (2009) Setting Hospital Rates to Control Costs and Boost Quality: The Maryland Experience. Health Affairs September/October 2009 vol. 28 no. 5 1395-1405

Rajkumar, R., Patel, A., Murphy, K., Colmers, J. M., Blum, J. D., Conway, P. H., & Sharfstein, J. M. (2014). Marylandʼs All-Payer Approach to Delivery-System Reform. The New England journal of medicine, 495-498.

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