Maryland Illustrates Opportunities and Challenges of Value-Based System Transformation

Maryland has long been at the forefront of health care reform.  The state’s unique hospital payment system, which includes Medicare, Medicaid, and commercial insurers, sets global hospital budgets that include both inpatient and outpatient hospital services.  The state facilitated a multi-year patient-centered medical home program, and CareFirst, the largest commercial insurer, has also implemented its own PCMH efforts.

Maryland’s efforts have been much in the news.

In general, these evaluations concluded that health care reform efforts have had a positive impact in Maryland.  They also convey the complexity of health care transformation, and the difficulty of isolating the impact of any single intervention.  For example, the JAMA evaluation observed a 10% reduction in hospitalizations for Medicare patients, but observed a similar reduction in non-PCMH practices.  The CMS evaluation of global budgets found that it “reduced both total expenditures and total hospital expenditures for Medicare beneficiaries without shifting costs to other parts of the health care system.”  However, the report notes that “hospitals varied considerably in the extent to which they had made changes to adapt to the All-Payer Model.”  The evaluation of the multi-payer PCMH program found benefits in quality and cost.  Taken together, all these evaluations point to the potential of value-based models to move the health system forward.  They also illustrate that these gains are hard won and not always distributed equally across the health system.  Much hard work remains before we will have achieved the full potential of a high-value health system.

Discern Health has been engaged in Maryland’s and other states’ efforts to design and implement models to improve the quality and efficiency of health care.  For information on our work in this area, please contact the firm’s managing partner, Guy D’Andrea, at or 410-542-4470 x101.

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