New Report Evaluates Impact of Maryland’s All-Payer System on Health Care Costs

NEW YORK, NY – This week, Democratic presidential candidates will debate each other for the first time, and health care reform proposals like Medicare-for-All are sure to be on the table. Some Medicare-for-All advocates claim that the United States could reduce health care costs by allowing the government to set the price for what a hospital can charge for every medical service. However, a new Manhattan Institute report by senior fellow Chris Pope finds that there is little evidence to back up this claim.

Medicare-for-All advocates like to compare the United States to other countries like Sweden or England, but Pope’s report focuses on Maryland because the state has spent 45 years regulating hospital payments. Pope argues that comparing Maryland to similar states, like New Jersey, provides much better information than foreign countries that differ greatly from the United States in patient demographics, medical needs, labor costs, and more. 

“Although Maryland’s system looks promising on certain regulatory outcomes, when you look at the whole picture, the results are unimpressive,” said Pope. “Health care is not any cheaper or better in Maryland than in other states.”

Not only has Maryland’s regulation of hospital prices failed to reduce the state’s health care costs, Pope’s report finds no evidence that Maryland’s all-payer system has resulted in better quality or access to care when compared to other states.

“The only reason Maryland’s system still exists is because it allows state hospitals to game the system and claim a unique subsidy from the federal government,” said Pope. “The big difference between Maryland and other states is that the state receives an extra $2 billion in federal funding through Medicare reimbursements–an arrangement that inflates costs rather than reduces them.”

Click here to read the full report.