I was disappointed in the Jan. 18 editorial, "A bold experiment in per capita spending limits" which included several inaccuracies and mischaracterized key aspects of Maryland's new reimbursement agreement with the CMS.
First, it's important to correct the errors. Maryland has not committed to limit per capita hospital cost growth to the national GDP minus 0.5% for 2015 through 2018. Rather, the state has agreed to limit hospital cost growth based on the state's economic growth, to a 3.58% per capita annual cap. Also, the state has agreed to directly reduce Medicare hospital spending by $330 million over five years (which would amount to an estimated 0.5% less than the national spending trend); this would be measured by comparing Maryland's Medicare per capita total hospital spending to the national Medicare per capita total hospital spending.
Also, Maryland's experience with capped payments has not come via critical-access hospitals (which do not exist in the state). Rather, 10 hospitals with sizable capacity (as many as 280-plus beds), have joined a total patient revenue system in which annual budgets are fixed by the state's rate-setting commission regardless of patient volume and services provided.
Finally, while it's true that Maryland's per capita Medicare hospital costs are high, Maryland's system has enabled the state to slow the pace of Medicare spending growth when compared with the national average (the waiver was initially granted in the 1970s as a way to test a new, equitable way of providing care, especially to uninsured people, and required Medicare to pay the same rate as private insurers, not the other way around). Also, the editorial fails to mention that the increased per capita costs are offset in several ways, such as reduced federal subsidies for people receiving coverage through the state's health exchange and reduced insurance costs for federal workers, who number about 300,000 in Maryland.
Of greater concern is the editorial's myopic focus on capping payments. That line of thinking suggests that cost savings are the sole motivator in this new agreement. Nothing could be further from the truth. This agreement is about crafting a model built on cost and quality incentives to create a system of care that is sustainable, and more importantly, places the focus of healthcare delivery where it should be—on keeping people and populations healthy. This agreement is much more than a series of numbers and metrics. It's about the chance to effect a broad-based, forward-thinking reinvention of healthcare as we know it.
Carmela CoylePresident and CEOMaryland Hospital Association