Maryland’s Economic Structure During COVID-19: The Next Steps
By Micah Ferguson, Intern
Micah Ferguson is a second-year Community Health and Anthropology double major. She is from Baltimore County and attending the University of Maryland.
During any health crisis, but especially the ongoing COVID-19 pandemic, those without access to adequate healthcare have suffered the most. Aspects of state healthcare systems including charity care, safety net funding, and access to healthcare play a central role in health outcomes for disenfranchised communities. The long-term economic plan for the state of Maryland is a model for prioritizing healthcare workers and investing in health equity. This article will discuss key budget features that make Maryland an inclusive, yet cost-efficient health system.
It is important to note that financially, Maryland has created a carefully planned budget allowing programs to allocate funds toward equitable programs. The Center for Medicare and Medicaid Innovation (CMMI) recently recognized Maryland in a white paper for its cost-effective “All-Payer” program and its successes system-wide. In 2014, Maryland created a health model very different from the typical ‘fee-for-service’ model many hospitals nationally use - this ‘fee-for-service’ model is particularly inaccessible to low-income and rural communities because of the low number of procedures in an area and per capita income. To be more equitable, the CMMI program created a model authorizing global hospital budgets based on size and procedures done. This budget is not based on patient population size, so it does not serve as an excuse to reduce patient stays, and any funds not used automatically funnel back into patient-focused programs. This incentivizes hospitals to adequately treat patients while saving. The ‘fixed revenue’ developed over time also allowed hospitals to financially plan ahead each year.
This reliable system greatly impacted Maryland’s economic downturn during COVID-19, as many Maryland hospitals were able to moderately predict their revenue, and prevent their funds from decreasing. Hospitals faced only a 14.6% decrease in outpatient care revenue and 1.6% decrease for inpatient care revenue in 2020, while national hospital income had decreased by almost 80%. This system also prevented hospitals from losing an approximate $450 million had they adopted the ‘fee-for-service’ model. This system is one that has been proven to work, even in the wake of the unexpected, and this success is expected to continue through the 2023 fiscal year.
In addition to this system, Larry Hogan also proposed $100 million in funding for hospital staff and nursing homes, $50 million of which was for staffing and the existing workforce, and $25 million each of which was for the hospitals and nursing homes themselves. Hogan also proposed $30 million to go to schools for buying testing results, and $15 million in emergency funding for Adult Medical Day Care centers. The pandemic response aspect of Hogans’ 2023 budget also prioritizes PPE storage, the COVID-19 data system - CRISP, vaccine incentives for Medicaid users, and Public Health Services. Though these funds make up only about 1-2% of Hogan's $58.2 billion budget, compared to California, the state with arguably the best public health in the nation, this budget allocates even more to COVID-19. And because of Maryland’s health model, it is guaranteed that this money will either be used for low-income or disabled individuals, hospital staffing, patient programs, or directly impact COVID-19 efforts through data collection and testing/vaccinations.
Thus, in summary, the economic organization of Maryland’s health budget is based on primary health care, and continually aims to decrease expenditures. The structure and specific budgeting focus can be conducive to the well-being of disenfranchised individuals, it is truly dependent on how true Maryland’s state government stays to their plan. So frankly, we are doing relatively well. As we are entering this new wave of outbreaks, we must hold our governmental structures accountable. And coming into this new fiscal year, Maryland’s funding plans to prioritize the health of the citizenry.
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