Dive Brief:
- Democratic presidential candidate Martin O'Malley released his health policy plan, which is similar to Hillary Clinton's and Sen. Bernie Sanders' plans, but doesn't advocate a single-payer system.
- The plan, which incorporates global budgets where hospitals have a predetermined amount of revenue and must meet quality goals to be paid, was implemented in Maryland last year and saved Medicare $116 million.
- In addition, per capital hospital costs were reduced by more than 1% in the state and there was a 26.3% reduction in potentially preventable complications.
Dive Insight:
O'Malley's health plan includes a long list of potential reforms, including but not limited to, creating an option for states to adopt hospital global budgeting, a new "Medicare Essential" program to provide comprehensive benefits in one opt-in plan, and increasing support of primary care via expanding current payment models that promote widespread adoption of medical homes.
As former Governor of Maryland, O'Malley spearheaded the effort last year to curb the state's medical spending by negotiating with state and federal officials a plan to reward hospitals for keeping residents out of the hospital. Called "the boldest proposal in the United States in the last half-century to grab the problem of cost growth by the horns," by Uwe Reinhardt, a healthcare economist at Princeton Univerisity, Maryland hospitals agreed all revenue would rise no faster than the growth in the overall state economy. Despite some doubts the program wouldn't work, it has proven to be successful, as reported in the New England Journal of Medicine earlier this month.
When it comes to making healthcare more affordable, O'Malley's health policy plan includes requiring transparency in healthcare billing, enforcing antitrust laws to prevent dramatic price increases, fighting corporate tax inversions (as seen in the recent Pfizer-Allergan merger), and banning price gouging for prescription drugs.
Economists say O'Malley's plan deserves to be in the spotlight. Amitabh Chandra, a Harvard economist, told Vox, "We need a lot more experimentation in healthcare. Right now we have Massachusetts and Maryland experimenting with new models. We need the other 48 states to do more."