MARYLAND HAS been a pioneer in regulating hospital rates through a state agency known as the Health Services Cost Review Commission.
Introduced in the 1970s when Maryland had among the highest hospital costs in the nation, the HSCRC was a vehicle to set rates for hospitals and to gradually ratchet down costs. As a result, the state's hospitals moved from among the most costly to among the most cost-effective in the nation.
One of the unique, and I believe most important, features of the HSCRC is the "all payer" nature of the system. Rather than requiring hospitals to shift the costs of the uninsured to a diminishing group of commercial payers, the HSCRC requires all payers to pay the same rates, effectively eliminating discounting and spreading the cost of the uninsured over many payers.
But after decades of HSCRC-imposed cost-cutting, further cuts - such as in nurse staffing - would hurt quality. A new vision for the HSCRC is required if Maryland is to retain its leadership role in developing an equitable and rational system for hospital-based care delivery.
My proposal: Rename the HSCRC the HSQRC - that's Health Services Quality Review Commission - to shift the emphasis from cost containment to quality enhancement. Continued reductions in hospital costs will produce only an unwanted degradation in quality. This new quality focus would significantly improve the services hospitals provide and actually work to bring overall hospital costs down substantially.
Consider: Every adverse event in a patient's hospital stay, such as a medication error, infection or other complication, generally leads to higher costs. It means a longer stay and more need for diagnosis or therapy that would otherwise be unnecessary, to say nothing of the added morbidity and mortality that affect patients and their families.
We already know that simple changes in hospital procedures - such as making sure patients receive appropriate and agreed-upon treatment regimens - will reduce complications, length of stay and costs. But currently, our hospitals are not focused on the necessary quality initiatives that produce such outcomes.
The new HSQRC could effect changes in a relatively simple fashion, not unlike the methodology the old HSCRC has used for cost containment.
It could partner with the Maryland Health Care Commission to:
Enlist physicians, nurses and public health professionals to develop quality standards by which hospitals would be measured. Such standards could include the number of medication errors, infection rates, morbidity and mortality, etc.
Require mandatory reporting of these results in a standardized format.
Promote transparency that allows comparison of individual hospital results to the statewide average (after appropriate corrections).
Adopt "no fault" reporting of medical errors so doctors and nurses have incentives to identify errors as results of a faulty system and not necessarily a mistake by an individual.
When this is accomplished, the HSQRC could adopt rate reimbursement plans that reward hospitals performing well on the quality index and penalize those that do poorly.
This new vision could again make Maryland hospitals the least costly in the nation by a wide margin. More importantly, they would rapidly achieve the highest quality - something of enormous benefit to every citizen in our state.
William R. Brody, a medical doctor, is president of the Johns Hopkins University.