4 ways Maryland's new all-payer system is advantageous

Maryland's change to the way hospitals get paid has had a positive impact, according to a National Public Radio report.

The state, through an agreement with CMS, has phased out fee-for-service payments, in which hospitals are paid for each procedure, each emergency room visit and each overnight stay. Instead, the hospitals get a set amount of money — called a global budget — for the whole year, which isn't based on how many patients they treat, according to the report.

Here are four ways the system has paid off.

1. The experiment saved an estimated $116 million last year, the first year it was in operation, according to a report in the latest New England Journal of Medicine.

2. As part of the deal with CMS, Maryland promised to reduce preventable health problems — including bed sores and transfusions with the wrong type of blood — by 30 percent, and save Medicare $330 million over five years, according to the report.

NPR notes the state also promised to reduce its hospital readmission rates for Medicare patients, down to the national average.

Based on preliminary data for 2014, Maryland hospitals saw a 26 percent drop in potentially preventable conditions.

3. Medicare per capita hospital costs also dropped in Maryland by more than 1 percent, according to the report. That drop came at the same time Medicare per capita hospital costs rose nationally by more than 1 percent.

4. In addition, NPR points out that the state's readmission rate came down. However, the report notes, it still remains higher than the national average.


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