The Key to a Resilient Healthcare System

As we approach the end of the national Public Health Emergency for COVID-19, healthcare leaders are reflecting on what went right – and what could be done better in the future.

In Maryland, healthcare providers and payers have learned that patients win when we collaborate across the healthcare community. It’s an approach that should be embraced for the long haul.

During the pandemic, "winning" was relative. Maryland struggled with many of the same challenges faced by communities and health systems nationwide. Like frontline workers nationwide, Maryland’s providers faced off against an unpredictable, ever-evolving threat – all while grappling with depleted resources and structural shortcomings. Years of underfunding public health initiatives in a system built on racial and ethnic disparities exacted a deadly toll on the nation and our state.

Despite this immense pressure on hospitals and frontline workers, Maryland’s healthcare infrastructure proved comparatively and remarkably resilient. In an analysis of vaccination rates, hospitalization rates, and COVID-19-related mortality, Maryland ranked 6th nationally among states for COVID-19 health system performance. And while many hospitals struggled during the height of the pandemic, Maryland’s ICUs only experienced high-stress capacity for 11 days – among the lowest in the nation.

In the wake of the pandemic, hospitals in other states faced a financial crunch that led to the elimination of critically important service lines such as oncology, obstetrics and emergency room care – and even resulted in hospital closures. Maryland, however, largely avoided these financial issues.

Johns Hopkins Medicine researchers wrote in a leading public health journal: "Maryland hospitals had revenue reductions in the first months of the COVID-19 pandemic, followed by an almost complete recovery for inpatient revenue and partial recovery for outpatient revenue in May through July."

The researchers attributed this smooth financial recovery to Maryland’s ‘all-payer system,’ a unique approach to paying for hospital services. The system is supported by stakeholders throughout the healthcare system and policymakers on both sides of the aisle.

Created in the 1970s, Maryland’s ‘all-payer system’ ensures hospital reimbursement rates are set by an independent state agency – the Health Services Cost Review Commission (HSCRC). The Commission aims to constrain hospital cost growth, ensure hospitals have the financial ability to provide efficient, high-quality services to all Marylanders, and increase the equity and fairness of hospital financing.

While Maryland hospitals saw the same reduction in patient volumes as their peers in other states, the HSCRC swiftly intervened and ensured the financial stability of these essential healthcare services through a prolonged period of volatility.

The HSCRC interventions and additional revenue secured from federal funds helped ensure that each hospital could maintain its allotted annual budget. The system prevented a windfall to health insurers in the state.

Maryland’s innovative healthcare payment policy approach was critical in preserving access to care during the COVID-19 pandemic. Preventing excessive financial turbulence for providers played a key role in Maryland’s high-ranking performance during these pandemic years.

Even as society enters a new normal, with the help of vaccines and boosters, we must recognize that COVID-19 was not the first and will not be the last public health crisis to confront our healthcare system. The pandemic tested our individual and institutional resilience and demonstrated the critical need to prepare for the unexpected.

The entire healthcare community must stand together and work with our state and federal partners to ensure the sustainability of the all-payer system. Undoubtedly, we’ll need this critical tool to combat current and future threats to public health. Even if the program requires reforms to respond to real-time issues and market conditions, it’s critical to ensure it continues to do what it’s intended to do: promote high-quality, equitable and affordable care for Marylanders.