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Maryland blazes a bold trail to reduce hospital spending

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Maryland officials have reached agreement with the federal government to radically revamp the way hospitals are paid. If the plan works, the state's hospitals will be financially rewarded for keeping people out of the hospital instead of in it, Kaiser Health News reports.  

“This is without any question the boldest proposal in the United States in the last half century to grab the problem of cost growth by the horns,”  Uwe Reinhardt, a healthcare economist at Princeton University, told KHN. 

After months of negotiations, Maryland hospitals also agreed that their revenue from all sources — private insurance, government and employers — will rise no faster than growth in the overall state economy. State regulators with the power to cap spending will enforce the agreement, which analysts say could serve as a model for other states and eventually the nation, writes KHN. Read more.  

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