As the COVID-19 situation improves in Maryland, hospitals not immune to losses

• Maryland COVID-19 cases have stabilized, the governor said.
• Hospitals there lost 25% of patient volume during the height of the outbreak and attendant shutdown.
• The state’s global rate-setting model provided a limited “backstop” to hospitals, an executive with the Maryland Hospital Association said.

Maryland has turned the corner in the COVID-19 pandemic, but its unique hospital-funding model has not completely insulated those facilities from shutdown-related losses.

“Our positivity rate has been relatively flat and on a slightly declining level for at least three weeks now,” Maryland Gov. Larry Hogan said in a July 21 webcast interview at the American Enterprise Institute.

Hogan ordered Maryland hospitals to suspend elective procedures and treatments March 18 — allowing them to resume May 6 — as part of the state’s approach to the pandemic.

Maryland hospital patient volumes cumulatively declined 25% in March and April compared with the previous year, said Brett McCone, senior vice president of healthcare payment for the Maryland Hospital Association (MHA).

“That’s a function of the governor’s executive order to put a hold on all of the scheduled and elective procedures here in the state, so, it doesn’t surprise me,” McCone said.

McCone heard anecdotally that patients who came into emergency departments during that period were sicker “because they couldn’t hold off and it was urgent that they be seen.”

A recent TransUnion Healthcare analysis concluded patient volume has recovered most slowly at hospitals in the Mid-Atlantic region, which includes Maryland.

To illustrate the personal toll of the pandemic, Hogan said he postponed by “several months” a scheduled April 1 PET scan to check for the return of cancer “because of the overloaded hospitals.”

The impact of the global payment model

Maryland launched an all-payer hospital-rate setting system in the 1970s and in 2019 began expanding it to outpatient care.

The unique global payment model “has helped” hospitals financially, McCone said.

“It hasn’t completely addressed our financial problem, but it certainly provided somewhat of a backstop for us this year,” McCone said. “We still have lots of financial challenges, given all of the volume that is not regulated” by the model.

For example, not all outpatient surgeries and clinic visits are included in the global budgets, and “that volume is the same as it is anywhere else,” McCone said, referring to other states.

Outpatient volumes by the end of June were down 7% nationally but 23% in the Mid-Atlantic, according to the TransUnion analysis.

Although the most recent data is not yet available, McCone has heard anecdotally that volumes have increased since the governor’s order was lifted, in part due to pent-up demand.

The global model did not restrict Maryland hospitals from obtaining up to six months of advance payments from Medicare, which hospitals are bracing to begin repaying in August.

“That’s certainly something on the minds of our folks, as well,” McCone said.

Patient outreach campaign ramps up

Like many state hospital groups, MHA has launched a media campaign to let the public know that the facilities are “safe, ready and waiting,” said Amy Goodwin, vice president of communication.

The campaign “is just advising consumers in the state not to delay necessary care,” Goodwin said.

McCone said he has not heard about hospitals in the state having problems getting patients to return for needed care.

Hospitals in the suburbs of Washington, D.C., and John Hopkins Medicine in Baltimore had the most COVID-19 cases.

Continuing challenges

Hogan hailed hospital contributions to the state’s “coronavirus recovery response team,” which included physicians from Johns Hopkins Medicine, University of Maryland Medical Center and MedStar Health.

“We had all of these top docs on our teams; we also brought in top business leaders because we wanted both perspectives about getting our economy back safely,” Hogan said.

Maryland hospitals have added 6,000 hospitals beds, he said, and the state constructed field hospitals in preparation for any new surge. The state also has helped hospitals stockpile PPE.

“The hospital systems — almost everybody — needs to learn from this experience, because we can’t be caught like this again,” Hogan said, referring to the first wave of the pandemic.

However, the state is bracing for another wave.

“I’m very concerned about another shutdown and another flare-up” in the fall, Hogan said.