Maryland Receives OK for Healthcare Overhaul that Caps Hospital Spending

The state of Maryland is announcing a new initiative with the federal government to modernize the state's unique rate-setting system for hospital services.

The agreement, which will be announced Friday by state and federal officials, is designed to move Maryland away from reimbursing hospitals on a fee-for-service basis to an emphasis on prevention and quality of care. Under the new plan, hospitals will do better financially as they provide high-quality care and help keep communities healthier, rather than being rewarded solely on the number of patients they treat, Dr. Joshua Sharfstein, Maryland's health secretary, said.

"It reflects a paradigm shift in the way that the healthcare system relates to public health," Sharfstein said. "Hospitals, doctors, nursing homes and many community health partners will all share in the same goal of improving health and controlling costs."

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Source: Modern Healthcare