Health Affairs February 10, 2025
In 2015, Maryland lawmakers believed that they had solved a serious issue facing the US health care system: incentivizing health care delivery systems to manage spending growth. In an initial pilot program under a Centers for Medicare and Medicaid Services (CMS) waiver, each Maryland hospital received a prospective, fixed budget for the year based on services that are expected to be rendered to public insurance recipients. This model replaced the traditional fee-for-service approach to paying hospitals. The resulting program has been touted for its ability to manage overall health care costs, while simultaneously improving the quality of care.
Broadly, this approach is referred to as Global Budget Revenue or a Total Cost of Care model. One of its key mechanisms...
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