Maryland Outperforms Nation on Health Spend
National health care costs continue to rise, but Maryland, led by its hospitals and health systems, has worked to lower cost growth while improving the quality of care. Maryland ranked second-lowest in the U.S. on inpatient and outpatient hospital spending in employer-sponsored insurance (ESI) plans in 2017.
This issue of MHA Insight focuses on hospital spending and employer-sponsored plans’ cost experience and trends in premiums.
The state has an agreement with the Centers for Medicare & Medicaid Services requiring all payers — Medicare, Medicaid, ESI plans, individual plans, and others — to pay the same rate. In addition, the model incentivizes hospitals to reduce unnecessary hospital use, focus on upstream and preventive care, and improve care coordination across the health care continuum. This model is overseen by Maryland’s Health Services Cost Review Commission and holds hospitals accountable at a level unseen in other states.
Maryland beats the nation on controlling health care prices and usage in ESI
Maryland’s prices for all health services combined (hospital, professional, prescription drug) grew by 16.5% between 2013 and 2017, versus 17.1% for the U.S.
Maryland’s utilization fell by 1.4%, versus only 0.2% for the U.S.
The Maryland Model succeeds in limiting hospital spending
Employer-Sponsored Insurance Hospital Spending Growth 2013-2017
How Maryland compares to other states on employer-sponsored health care spending
SOURCE: The Health Care Cost Institute 2017 Health Care Cost and Utilization Report compares per person spending across the U.S., by service categories, and growth in spending between 2013-2017. The report is based on 40 million claims from Aetna, Humana, Kaiser, and United Healthcare for approx. 40 million individuals up to age 65 with employer-sponsored coverage.
2nd lowest in U.S. in hospital spending
Maryland’s hospitals and health systems are successfully controlling spending, particularly in inpatient and outpatient settings where they have the most direct control.
SOURCE: The Health Care Cost Institute 2017 Health Care Cost and Utilization Report compares per person spending across the U.S., by service categories, and growth in spending between 2013-2017. The report is based on 40 million claims from Aetna, Humana, Kaiser, and United Healthcare for approx. 40 million individuals up to age 65 with employer-sponsored coverage.
The Maryland Model is successful. Why aren’t consumer costs going down?
Maryland’s hospitals are managing to slow the rising cost of care. Consumers are not seeing the benefit. As health care spending slows in Maryland, data from employer-sponsored insurance plans show that both premiums and patient cost-sharing continue to rise steeply.
SOURCE: State Health Access Assistance Center (SHADAC) analysis of the Medical Expenditure Panel Survey - Insurance Component. State-Level trends in employer-sponsored health insurance (ESI), 2013-2017.
From 2013 to 2017 single coverage premiums in Maryland grew by 14.8%.
Average out-of-pocket caps grew by 45.6%, and deductibles grew by 42.9%.