A $1,775 Doctor's Visit Cost About $350 in Maryland. Here's Why.

'For the past 18 months, while I was undergoing intensive physical therapy and many neurological tests after a complicated head injury, my friends would point to a silver lining: “Now you’ll be able to write about your own bills.” After all, I’d spent the past decade as a journalist covering the often-bankrupting cost of U.S. medical care.

But my bills were, in fact, mostly totally reasonable.

That’s largely because I live in Washington, D.C., and received the majority of my care in next-door Maryland, the one state in the nation that controls what hospitals can charge for services and has a cap on spending growth.

Players in the health care world — from hospitals to pharmaceutical manufacturers to doctors’ groups — act as if the sky would fall if health care prices were regulated or spending capped. Instead, health care prices are determined by a dysfunctional market in which providers charge whatever they want and insurers or middlemen like pharmacy benefit managers negotiate them down to slightly less stratospheric levels.

But for decades, an independent state commission of health care experts in Maryland, appointed by the governor, has effectively told hospitals what each of them may charge, with a bit of leeway, requiring every insurer to reimburse a hospital at the same rate for a medical intervention in a system called “all-payer rate setting.” In 2014, Maryland also instituted a global cap and budget for each hospital in the state. Rather than being paid per test and procedure, hospitals would get a set amount of money for the entire year for patient care. The per capita hospital cost could rise only a small amount annually, forcing price increases to be circumspect.'>>>

https://www.nytimes.com/2021/10/24/opinion/maryland-medical-bills-lower.html