Should we try a bit of Maryland in Mass.?

A correction has been added to this story, correcting the transposition of the name of 
Ezekiel Emmanuel.

Do what Maryland did.

That was one of the prescriptions health policy guru Dr. Ezekiel Emanuel of the University of Pennsylvania offered for rising health care costs at the annual conference of the Massachusetts Association of Health Plans in November.

In Maryland, the state sets all hospital rates. Few people are more familiar with how that regulatory process originated there and how it has worked than Dr. Josh Sharfstein, one of the architects of the system. He currently serves as the vice dean for public health practice and community engagement at Johns Hopkins Bloomberg School of Public Health, and he joined John McDonough of the T.H. Chan School of Public Health at Harvard and Paul Hattis of the Lown Institute on The Codcast.

Sharfstein clearly prefers the Maryland regulatory approach, but he said its long history of state rate setting is fairly unique. “It’s hard to snap your fingers and turn another state into Maryland,” he said.

The most unique aspect of the Maryland system is that the rates established by the state apply to all payers — commercial, Medicaid, and Medicare. In Massachusetts, by contrast, commercial rates are set through negotiations between insurers and health care providers while Medicare and Medicaid rates are set by the federal government. Medicare and Medicaid rates tend to be lower than commercial rates, so many providers in Massachusetts use commercial customers to cross-subsidize their government work for the elderly, poor, and disabled. 

Sharfstein said the Maryland system worked fairly smoothly until some of the smaller, more rural hospitals saw their patient volumes decline. Since they were paid based on the number of procedures or services they provided, their income dropped and so did their quality.

The state responded by setting global budgets for the rural hospitals. Instead of being paid for each service they provided, they received payment to cover all of their allowed costs. Sharfstein said the decision was fateful, because it triggered a reaction at the hospitals.

“The hospitals started doing things differently,” he said. “They started asking how can we keep people from coming into the hospital.”  

In 2014, Maryland expanded the so-called global rate-setting approach to every hospital in the state. Sharfstein, who helped orchestrate the new approach, said it worked beautifully. For the first five years, he said, the state met all of its benchmarks in terms of reducing costs, increasing quality, and lowering the number of preventable admissions.

“There are not that many models in health that achieve their goals, were proposed by a Democratic governor [Martin O’Malley] and approved by a Democratic president [Barack Obama], re-proposed by a Republican governor [Larry Hogan] and re-approved by a Republican president [Donald Trump], and really maintain an enormous amount of public support,” Sharfstein said. “People in Maryland feel a lot of pride about the way the health care system is working.”

Hattis asked how academic medical centers fare under such a rate-setting system. “John Hopkins has thrived under global budgets,” said Sharfstein.

McDonough sounded skeptical that Massachusetts could move to a Maryland-style system. He said when he served as a member of the Massachusetts House the state’s system of rate setting was riven by “political conflict and gamesmanship” and the situation became so bad that it was abolished in 1991.

Sharfstein said Maryland has had 40 years of experience with hospital regulation. Over that time, he said, a sense of trust has developed that all players will be treated fairly. That may not be the case in other states, he said.

“There are some hospitals that have done pretty well under fee for service and giving up a little bit of control to an outside entity is not at the top of their agenda, frankly,” he said. “They’re going to be pretty resistant and they’re going to use every political tool that they have to avoid some kind of restraint on their revenue growth.”

He added: “It’s hard to invent 40 years of history and trust in another state.”

BRUCE MOHL 

 

FROM COMMONWEALTH

Fare-free powwow: Boston, the MBTA, and the Federal Transit Administration are meeting this month on the city’s bid for a two-year fare free bus pilot on three routes. “We’re on a path to figure this out,” says T General Manager Steve Poftak. Read more.

Consent questions: Police need a driver’s consent to draw blood for a blood-alcohol test, but what happens when blood is drawn with consent for medical reasons and then tested by police. That’s what the Supreme Judicial Court will have to decide. Read more.

New Year surprise: A long-awaited report indicates the state’s unemployment insurance trust fund isn’t in as bad financial shape as the Baker administration and the business community had come to believe. Instead of billions in the red, it’s deficit is $115 million. Read more.

Bonus returned: James Vander Hooven, the president of Mount Wachusett Community College, is returning a $3,900 bonus he inappropriately gave himself. Read more.

Azores connection: Sen. Michael Rodrigues of Westport, a Catholic, helped lead the effort to restore a rundown and abandoned Jewish synagogue in the Portuguese Azores. Read more.

Tipped minimum wage: Opponents of the tipped minimum wage say it’s time for it to go because it often leads to racial and sexual harassment on the job. The opponents favor one minimum wage for all. Read more.

GLX is coming; Gov. Charlie Baker goes on a GLX joyride with local Somerville officials. Read more.

Body-cam delay: A commission set up to establish standards for the procurement of police body cameras misses its initial deadline because it was slow to set up. Read more.

OPINION

Wish list for Pier 5: Now that the Boston Planning and Development Agency has scrapped plans to redevelop Pier 5 in Charlestown, the agency is putting the onus on the community to come up with an alternative plan. Read more.

Green Zones: Ed Gaskin of Greater Grove Hall Main Streets explains why we need to identify Green Zones in our communities to deal with environmental hazards. Read more.

 

FROM AROUND THE WEB

 

BEACON HILL

Nearly 1,000 state executive branch employees lost their jobs because they did not get a COVID vaccine. (State House News Service)

The Baker administration wants the Legislature to move ahead on a bill imposing sanctions on drivers under the influence of marijuana or other drugs but critics say the measure is deeply flawed and shouldn’t be passed. (Boston Globe

MUNICIPAL MATTERS  

Boston Mayor Michelle Wu ordered many of the city’s 18,000 employees to shift to remote work for two weeks amid the surge in COVID cases from the Omicron variant. (Boston Herald

Charlie Sisitsky was sworn in as mayor of Framingham with Rep. Maria Robinson serving as emcee. “I intend to bring a spirit of cooperation, respect, and civility back to City Hall,” he said. (MetroWest Daily News)

Outgoing Gloucester Mayor Sefatia Romeo Theken speaks to the Gloucester Daily Times about her accomplishments during her seven years as mayor and her challenges, and says she plans to stay involved in city affairs. Incoming Gloucester mayor Greg Verga tells the paper he seeks to reset the tone at City Hall. (Gloucester Daily Times)

Orleans officials are looking at zoning changes that would allow dormitories to be built for seasonal workers. (Cape Cod Times)

Inaugurations across Western Massachusetts are scaled back due to COVID concerns. (MassLive)

HEALTH/HEALTH CARE

The striking nurses at St. Vincent Hospital will vote on a new contract today. (Telegram & Gazette)

South Shore residents are frustrated at the difficulty of getting a COVID test, with long lines at testing sites leading to many people getting turned away. (Patriot Ledger)

WASHINGTON/NATIONAL/INTERNATIONAL\

Rep. Hakeem Jeffries appears to be the favorite to take over leadership of the Democratic caucus in the House if, as expected, Speaker Nancy Pelosi does not seek reelection next year. The Washington Post says many members see Massachusetts Rep. Katherine Clark, currently the assistant speaker, as a likely “second-in-command” in a partnership with Jeffries. 

BUSINESS/ECONOMY

Western Massachusetts-based public companies had a good year in 2021, based on their prices on the stock exchange. (MassLive)

EDUCATION

As teachers’ unions push for school closures Monday, Baker officials say students will return to the classroom. (MassLive) Some public health experts say reopening schools today is a mistake that will overwhelm the state’s health care system. (Boston Herald

MassLive publishes a database for each school district, looking at what percentage of graduates attend college versus go straight to work. 

TRANSPORTATION

A multimillion-dollar project to update the aging trolleys on the MBTA’s Mattapan-Ashmont line is more than two years behind schedule. (Boston Globe

CRIMINAL JUSTICE/COURTS

A high roller at MGM Springfield claims $20,000 went missing from his hotel safe, after the hotel mistakenly thought he had checked out. (MassLive)

MEDIA

Axios prepares to launch a local newsletter in Boston this month. (Universal Hub)

PASSINGS

Mary Richardson, the longtime co-host of “Chronicle” on Channel 5, died at age 76, seven years after being diagnosed with Alzheimer’s disease. (Boston Globe)