REDEFINING THE “H”: Maryland hospitals change their role

What does “redefining the H” mean?  You know those blue signs on the highway — blue background, BIG WHITE H?  Universally known as guiding to a hospital.  Changes prompted by the Affordable Care Act, among other factors, are prompting hospital executives and boards to rethink the meaning of “hospital.”  To redefine the H.  The following articles report some interesting movement along those lines.

Maryland is unique.  Operating under a 36-year-old Medicare waiver, the state has had permission to set its own rates for hospital care of Medicare patients — a rate that has been higher than Medicare paid in other states.  These payments were on a per-case basis, making it advantageous for hospitals to admit patients. Maryland was the only state to have such an arrangement in place.

Now, Maryland has a new Medicare waiver that switches payment to a global budget.  This means that hospitals will be paid a certain annual amount, regardless of the number of patients admitted, which creates powerful incentives to decrease inpatient admissions.  There are also quality targets that must be met.

Western Maryland Health System (Cumberland, MD) was one of 10 hospitals in the state to participate in a pilot project for this new system.  The CEO and CFO report on some of the lessons learned:

• Quality measure scores may bounce around as new approaches are tried.
• You have to educate, educate, educate — hospital employees, doctors, and patients
• You are probably going to have to downsize hospital staff — or reassign them to non-acute care sites

Sources:  Gantz, S.  Maryland reaches milestone deal with feds for new Medicare waiver.  Baltimore Business Journal, Jan. 10, 2014; Click here for access to this article http://www.bizjournals.com/baltimore/news/2014/01/09/maryland-medicare-waiver-agreement.html?s=print; and,  Gantz, S.  Western Maryland Health System CEO talks challenges of shifting to new payment system.  Baltimore Business Journal, Feb. 4, 2014.  Click here for access to the article: http://www.bizjournals.com/baltimore/news/2014/02/04/western-maryland-health-system-ceo.html?s=print  Posted by AHA Resource Center (312) 422-2050, rc@aha.org