Sun Investigates

Maryland health care costs lower than other states, analysis finds

Maryland had the lowest health care costs in a comparison of five states conducted by the nonprofit Network for Regional Healthcare Improvement.

The state’s total costs were on average 16 percent lower in 2015 than those in Colorado, Utah, Minnesota and Oregon, the study found. The overall price of medical procedures, doctors visits, lab test and drugs was 13 percent lower in Maryland, according to results of the comparison compiled in the report “Healthcare Affordability: Untangling Cost Drivers.”


The total cost of health care was 4 percent below the average in Utah and equal to the average in Oregon, while Minnesota and Colorado had higher-than-average costs. Minnesota was 7 percent above the average and Colorado 17 percent.

This is the second year that the Network for Regional Health Improvement has compared costs among states. The group said that health care spending consumes one in every six dollars of the American economy and that one-third of that spending has no health benefit.


The group said it tried to gather more detailed data on the factors that drive up health costs, such as how much people use medical services and how much drugs cost. The network hopes that gathering more data will allow it to give people the tools to address the higher costs.

“We haven’t had the information people can use as a catalyst to do something about it,” said Elizabeth Mitchell, the network’s president and CEO. “We have had little visibility into what is driving the costs.”

The group said there is no one-size-fits-all solution for reducing costs because the needs are different in each state. Minnesota patients had more doctors’ appointments and in Colorado they used more outpatient services.

‘I think one of the key findings is that it really varies by state,” Mitchell said.

Maryland’s all-payer insurance model has helped keep costs down, the report said. Under the model, Medicare and private insurers pay the same rates for services at hospitals, although prices differ from hospital to hospital. Hospitals in the state also operate under global budgets that don’t allow them to generate more revenue than designated They face a mandate to keep readmissions down and push more care out of the hospital.

State health officials said there are still improvements that can be made to drive down costs.

“This provides us a benchmark for where we are and what work we have yet to do,” said Ben Steffen, executive director of the Maryland Health Care Commission.

There is room to lower unnecessary “utilization” of the medical system, such as doctors’ visits or tests that aren’t needed, said Linda Bartnyska, director for analysis and information systems at the Maryland Health Care Commission. The commission is working on a statewide program to address the issue.


“We will look to collaborate with organizations to reduce low-value or no-value services in health care,” Bartnyska said.