The State of Healthcare Affordability

Policymakers are determining the future of healthcare payment in Maryland. Is your voice being heard?

Did you know Maryland is the only state with an 'all-payer' payment system for hospital care? It doesn't rely on Medicare's national fee schedules and negotiated rates between each hospital and insurance carrier, which can vary widely. Instead, the state sets hospital rates for services. Under the Maryland Model, a hospital charges the same amount for every patient from the same facility, no matter what insurance coverage the patient may hold.

The Maryland Model is not a permanent arrangement but must be reviewed by the Federal government regularly. The current agreement will extend through 2026. The future of healthcare payment in Maryland is now in the hands of policymakers. Whatever they decide will impact how Maryland residents pay for and receive healthcare.

Informing Public Policy

The Health Services Cost Review Commission (HSCRC), the state agency that oversees the Maryland Model, engages various stakeholders in public policymaking. A critical voice is noticeably absent, however—the consumer.

Earlier this year, CareFirst BlueCross BlueShield (CareFirst) commissioned NORC at the University of Chicago (NORC) to study awareness of and experience with the Maryland Model. This study consisted of a consumer survey of Maryland residents with recent healthcare interactions and interviews with Maryland-based employers.

Key takeaways:

Low awareness about the Maryland Model suggests it doesn't engage the people it's intended to serve. Interviews revealed employers and brokers (who determine employee health benefits) misunderstand the model. They were also unaware that one of its objectives is to lower the cost of care.

The Employer Role in Healthcare Affordability

According to our study, people with health insurance through their jobs are the most likely to say healthcare is unaffordable. Government programs, such as Medicare, generally subsidize the cost of coverage. In the private markets, the individual or employer typically bears the cost of care. So, affordability issues are more likely to be felt by those purchasing job-based coverage.

CareFirst believes educating employers and brokers about the Maryland Model could go a long way in making care more affordable.

• If employers better understood how global budgets and hospital rate-setting worked, they might take a more active role in the benefit design process. For example, steering more employees toward lower-cost providers, which could impact that individual's cost and overall healthcare costs in the state.

Moving Healthcare Forward

Targeted engagement with healthcare consumers and employers could inform policies and actions, creating a better care experience for Marylanders. CareFirst recommends that the HSCRC do the following:

• Directly engage consumers, employers and brokers through a series of focus groups to better understand their nuanced healthcare needs
• Collect data to better understand access barriers for young and middle-aged adults, as well as Medicaid recipients and individuals who live in rural areas
• Educate employers—the state's largest health purchasing group—on the Maryland Model, empowering them to be more thoughtful, educated consumers to positively affect consumer experience, cost, access, outcomes and perceptions

These steps could result in changes to policies that place more emphasis on:

• health outcomes,
• convenient access to care, and
• limiting out-of-pocket exposure and untimely rate increases.

To learn more about how CareFirst is working to promote the affordability and accessibility of high-quality care, visit www.carefirst.com/transformation.

Disclaimer: The analytics discussed in this brief, including the survey and interviews, were conducted by NORC at the University of Chicago. All opinions and recommendations are solely those of CareFirst Blue Cross Blue Shield.