Never Mind Regulating Insurance Rates, What About Hospital Fees? A Look At Maryland's Health Services Cost Review Commission

Do believe that government should regulate health insurance premium rates?

If so, then why not agree with the government's regulation of hospital fee rates?

This article in JAMA explains how largely Democratic Maryland is using its "Health Services Cost Review Commission, or "HSCRC" to do precisely that to its 51 hospitals.  Its independent 7 member Board of Commissioners is appointed by the governor for four year terms.  Only 3 can be hospital administrators, hospital board members or hospital staff physicians.  Its budget of 7 million is paid for by a fee assessed on hospitals and much of it is used to collecting and publicly reporting cost and quality data.  The HSCRC uses patient risk adjustments, uncompensated care adjustments and other statistical factors to determine a "charge per case" which all insurers in the state are required to follow.  Medicare and Medicaid follows suit through a waiver system.

After the system was instituted in 1976, the rate of hospital cost inflation plummeted, making Maryland the lowest hospital charges of any state in the Union.  And by the way, the HSCRC is also incorporating pay-for-performance and a no-pay for certain complications in its fee schedule.

While the DMCB tends to be pro"market" and anti-regulation, that's not going to stop it from congratulating Maryland for taking a health care bull by the horns.  It thinks this is another example of a state that is stepping up with its own local version of health reform without having to necessarily wait for the federal government.  While the DMCB doubts that other states could pull this off, the HSCRC works in Maryland and the voters seem to like it.  That's quite a contrast when it's compared to  the Affordable Care Act.