Medicaid Services, under O’Malley Maryland adopted “without any question the boldest proposal in the United States in the last half century to grab the problem of cost growth by the horns.” The Maryland model switches away from expensive fee-for-service reimbursement for hospitals, providing a path to both improved health and lower costs. In the first year alone, the model has saved Medicare $116 million against national trends, with a 26.3 percent reduction in potentially preventable complications.
As president, O’Malley will create an option for states to adopt hospital global budgeting, the key to Maryland’s success. Global budgeting may be especially useful to support financially stressed rural hospitals. O’Malley will also give states the option to pursue models besides the Maryland approach, such as encouraging patient-centered medical homes (more below), accountable care organizations, and other innovations.