A State Of Emergency

By Charles L. Feitel

A continued demand to cut the cost of operations in hospitals in Maryland is creating a dangerous situation in the effectiveness of the health care available.
In the state of Maryland, insurance carriers, with respect to rates and reimbursements, regulate the health care profession. Specifically, health care providers such as hospitals and doctors negotiate a fee with the insurance company for services rendered. When the reimbursement rates decrease, there is a significant reduction of income for doctors and hospitals. In order to maintain the bottom line, health care providers must cut costs in their hospitals and practices.
In Maryland, hospitals are regulated by the state and have strict rules and regulations with which they must comply. In 1974, the Maryland Health Services Cost Review Commission established a rate control system to regulate the amount charged for medical services by hospitals. In this system, the hospitals must charge the same for services, regardless of who paid for the care, private insurance, a private citizen or the government.
The HSCRC began to set the rates charged for medical care to decrease the gap between the cost of health care in Maryland and the rest of the nation, (25% higher compared to the national average). Although this system was effective for many years, the average cost per admission to a Maryland hospital went up 3.74% reflecting a 3% increase in the expenses incurred by these hospitals in each of the last 5 years. Included in these expenses, is a 9.5% per year increase in drug costs. As a result, the HSCRC demanded a 1% rate decrease for all Maryland hospitals, in reaction to the service rate increase. (May 1999, Montgomery Business Gazette).
With the cost of operations rising, and the designated amounts for services decreasing, hospitals have little choice but to trim payrolls in order to operate in the black. Physicians and other health care professionals work longer hours, for lower salaries, to compensate for the loss of income and the rise in costs. This situation may lead to an inability of Maryland hospitals to attract well educated, talented health care professionals to understaffed, budget-crunched facilities that cannot provide quality care with state-of-the technology.
The acceptance of poor health care is a dangerous situation. Staff reduction and dollar-saving measures can only negatively affect the quality of care being rendered. To lower the standards of health care in a society leading the technological future is unacceptable.