The State of Maryland is unique in that hospital rates (the cost
charged for each patient admitted into a Maryland hospital) are governed by the
Maryland Health Services Cost Review Commission (HSCRC). Other state’s rates are driven by what the
market will bear and the prices charged are what the hospitals set themselves
for the services they provide. Fore
example, “When a patient arrives at Bayonne Hospital Center in New Jersey
requiring treatment for the respiratory ailment known as COPD, or chronic obstructive
pulmonary disease, she an official price tag of $99,690.Less than 30 miles away
in the Bronx, N.Y., the Lincoln Medical and Mental Health Center charges only
$7,044 for the same treatment, according to a massive federal database of
national health care costs.” (Boice, Bycoffe and Scheinkman, 2013. Huffington Post, Hospital Prices No Longer
Secret As New Data Reveals Bewildering System, Staggering Cost Differences.
http://www.huffingtonpost.com/2013/05/08/hospital-prices-cost-differences_n_3232678.html). These inflated costs are also used for
negotiating discounts with private insurance companies (Medicare and Medicaid
rates are set for each diagnosis).
With Maryland’s rates being set by the HSCRC, the cost of insurance
here is among the cheapest in the country.
Health plans that will operate on the new health exchanges created under
the federal reforms will charge among the lowest premiums of any state.
Maryland is not the only state that has implemented rate
setting. New York, New Jersey, Connecticut,
Massachusetts, Washington and West Virginia all experimented with rate setting
in the past as well. However, these
states have since discontinued. Given
the success Maryland has found in providing lower health care cost, why do you
think these states did not continue with regulating hospital rate setting?
Could price controls work nationwide? Should the federal government impose mandates
on all states to have a state agency such as the HSCRC in Maryland to regulate
their hospital rates? Please be specific
with your reasons for why or why not.
What could be the negative effects of each state’s rates being
regulated as it relates to patient care?
Below is supplemental reading to this week’s discussion:
The Maryland Health Care Commission regulates health care in the
State of Maryland. As you will note from the second assigned reading, it
is comprised of 5 Centers who are very distinct. Please list out one
service from each of the 5 Centers that you would find helpful as a health care
administrator and why (be specific). FYI – you will have 5 separate
services upon completion of this exercise.
For example, as a healthcare administrator (in a hospital), I am
interested in adding a new service line and need to obtain a Certificate of
Need. In order to obtain this Certificate of Need, I will work with the
Center for Hospital Services to find out what I need to do in order to
facilitate this process.
Please also see the following link for information about Maryland
Certificate of Need.