Maryland health system was boon to providers during pandemic

Maryland has a unique health care financing model which may have helped providers financially weather the pandemic storm. In the State of Reform panel “State Case Study: Maryland,” the system’s evolution and strengths were highlighted by a panel of people who helped develop it.


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Donna Kinzer — who now is a principal at Kinzer Consulting but was one of the main architects of the system — explained the stability of Maryland’s model allowed providers to focus on responding to the pandemic.

“Maryland definitely had a better time of it in terms of being able to better focus on fighting COVID. Building on the infrastructure we have in place through [Chesapeake Regional Information System for our Patients] CRISP, the moment a patient enters the hospital we have all the information we need to help them.”




The Maryland model of rate setting for hospitals goes back to the 1970s, Kinzer explained. Eventually it became unsustainable when the number of outpatients grew quickly despite lower unit rates, leading to a financially unsound system. The payment model moved to a global budget in 2014, which paid hospitals a set amount of money each year. This meant that hospitals would make more money by keeping patients well, rather than being paid when they are admitted into the system. The approach saved Medicare $586 million in its first three years.

In 2019, Maryland transitioned to its current Total Cost of Care Model, which expands this concept into other areas of health care.



Dr. Joshua Sharfstein, vice dean for public health practice and community engagement at Johns Hopkins Bloomberg School of Public Health, led the state’s transition into the Maryland All-Payer model that was put in to place in 2014. He said COVID-19 has been an enormous test of the system.

“For the most part, our health care system passed with flying colors. It is really inspiring to see.”

On the other hand, parts of the system came up short, he said. For example, the payment services system struggled. When payments quit coming in, there was a shift in revenue.

“It’s not clear how health care finds its way to a more resilient financing system. In Maryland, there is more flexibility. Nationally we still have this fee-for-service model. Maryland is different in that respect. I think it aided us in terms of fighting COVID, not just within hospitals, but with our outside services and nursing homes.”

Joe DeMattos, chief executive officer of Health Facilities Association of Maryland, touted the system.

“There’s no doubt that our primary care physician model saved lives [during COVID].”

DeMattos said the beauty of the system is that it was created through partnerships.

“Everyone knew everyone’s name, their emails, their phone numbers. It’s about the relationships that we all had. I think the partnerships we had were a huge part of our success.”

Kinzer said Maryland’s model makes it possible for the health care system to focus on social determinants of health. She believes the model is attractive to other states.

“Certainly it is in terms of its ability to control cost and focus resources on population health and chronic conditions.”

Sharfstein agrees.

“Core parts of the Maryland model could be implemented elsewhere. That’s why Donna’s phone is ringing off the hook. The most inspiring part is that when people hear us talk about the experience, they realize that if they are successful they can do what they went into health care for in the first place. The goal of business is aligned with health. And that’s a little bit infectious.”