<ul class="summary-list"><li>Health facilities were already in fiscal straits before COVID-19 - except in Maryland. </li><li>The state uses a data-determined annual budget for each hospital instead of fee-for-service pricing.</li></ul><p>The way the United States typically finances hospitals isn't working. The coronavirus laid this bare, along with many other long-standing societal problems.</p><p>Before COVID-19, most hospitals were operating on a standard "fee-for-service" model, in which the more procedures they do, the more they get paid. This worked for some hospitals, but it incentivized them to increase the number of procedures to make more money, which is not always in patients' best interests. And the fee-for-service model wasn't working for all hospitals, particularly those in rural areas or those that served low-income patients, where procedure volume and income are limited by sparse population and lower reimbursements from government payers, respectively. Before the <keyword id="11896136" type="UNKNOWN" weightage="60" keywordseo="pandemic" source="Orion">pandemic</keyword>, half of US hospitals had a profit margin of 3.5% or less. Between 2010 and the beginning of 2020, 120 rural hospitals were forced to close their doors.</p><p><keyword id="8764262" type="UNKNOWN" weightage="60" keywordseo="covid" source="Orion">COVID</keyword> has revealed the deeper vulnerabilities of the fee-for-service model. When the pandemic hit in early 2020, many hospitals had to postpone all non-urgent surgeries - their main source of revenue. This affected even facilities that had been in relatively good shape: From March to June 2020, the American Hospital Association (AHA) estimates that US hospitals lost more than $50 billion per month.</p><p>Things aren't looking much better now: In a <a href="https://www.aha.org/guidesreports/2021-09-21-financial-effects-covid-19-hospital-outlook-remainder-2021">recent report</a> prepared for the AHA, experts predict that hospital income still won't have recovered to pre-pandemic levels by the end of 2021, and could remain as much as 80% lower.</p><p>But in one state, the financial future for hospitals seems somewhat less bleak.</p><p>In Maryland, outpatient hospital revenue between January and July 2020 was only 14.6% lower than the same period in 2019; for inpatients, revenue fell by only 1.6%.</p><p>The reason Maryland hospitals fared better than those in other states during COVID is that the state long ago eschewed the traditional fee-for-service model, and instead adopted an entirely different payment system designed to keep costs down and facilities financially stable. This system proved itself to be particularly useful during the greatest financial threat ever to hit US hospitals and health systems. It protected Maryland's hospitals, keeping them functioning and financially solvent.</p><p>We believe other states could learn lessons from Maryland's experience.</p><p>How did Maryland end up with such a different system to pay for hospital care? In 2014, an independent commission in Maryland, with input from payers and hospitals, agreed to a specific annual budget for each hospital, determined by the number of patients and procedures in 2013, plus annual adjustments based on inflation and population growth. This created a system of fixed revenue, or a global budget, paid by all insurers (public and private), so hospitals could anticipate their yearly income, and plan accordingly.</p><p>The budget is not dependent on patient volume: If a hospital needed to treat more patients than it had anticipated, the reimbursement rate per patient fell; if fewer patients showed up, the rate rose. (The system continues to monitor hospitals to ensure they don't use the payment scheme as a reason to not treat patients, or to discharge them sooner than they should.)</p><p>Any savings that hospitals get from skipping unnecessary procedures - which come with costs such as supplies and additional staff - are channeled back into programs designed to keep patients healthy and prevent hospital readmissions. Many hospitals began by focusing on reducing readmissions; others are now working with partners in their communities to <a href="https://www.umms.org/ummc/news/2020/ummc-hopkins-team-up-tackle-diabetes-baltimore">redesign care to reduce diabetes and other chronic diseases</a>.</p><p>Another major benefit of Maryland's financing system is that it keeps hospital budgets relatively stable, even if patient volume drops off. So during COVID, as other hospitals fell into crises when elective procedures were canceled, Maryland hospitals stayed afloat, which gave them the stability to face the unknown and support frontline workers. A recent paper in the Journal of the American Medical Association estimated that under the usual fee-for-service pricing system, Maryland hospitals would have lost an additional $450 million between March and July 2020.</p><p>The system is working not just for hospitals. Every year, the cost of paying for health care grows, but in Maryland, that increase is smaller than in other states. Within the first five years of their new payment system, Maryland hospitals <a href="https://hscrc.maryland.gov/Documents/Updated%20APM%20results%20through%20PY5.pdf">saved Medicare $1.4 billion</a> by limiting the rise in per-capita spending, compared with the rest of the country. What's more, the quality of care doesn't appear to be suffering - in fact, the <a href="https://www.nejm.org/doi/full/10.1056/NEJMp1508037">rates of preventable hospital-acquired conditions such as pulmonary embolism, renal failure and venous thrombosis fell among patients.</a></p><p>We're not saying the Maryland hospital financing model would be possible everywhere - some states may not be able to get all interested parties on the same page. But it is well worth a try, and some states agree. In Pennsylvania, for instance, rural hospitals have moved to a global budget system similar to Maryland's. Other states such as Massachusetts are considering <a href="https://www.milbank.org/focus-areas/total-cost-of-care/peterson-milbank/">their version of global budgets.</a></p><p>Whether they succeed remains to be seen. But one thing is certain: Something needs to change. COVID has shown, in a stark way, that the current system of fee-for-service pricing in hospitals is bad in good times, and worse in crises. US hospitals - and their patients - deserve better.</p>

The fee-for-service model is hurting hospitals across the country - here's what Maryland is doing differently

<p><div class="KonaFilter image-container display-table"><div><div class="image on-image"><img src="https://static-ssl.businessinsider.com/image/56df10899105844e018b4e68-2000/rtx7hhf.jpg" alt="milk" data-mce-source="Reuters/Ho New" /><p class="source"><span>Reuters/Ho New</span></p></div><p></p></div></div></p><ul><li><strong>Fat can play a key role in a balanced diet: it keeps people full and energized and helps their bodies absorb more vitamins and minerals. </strong></li><li><strong>Some recent research suggests that eating dairy fats may help stave off obesity. </strong></li><li><strong>But certain fats (especially trans fat) should be avoided.</strong></li><li><strong>Moderation is key - nutrition experts say focusing too much on specific nutrients misses the main point of healthy eating. </strong></li></ul><hr /><p>Fat has taken turns as both a villain and a hero for healthy eaters.</p><p>In the 1990s, the US Department of Agriculture put fats and oils with sweets at the top of <a href="https://www.choosemyplate.gov/brief-history-usda-food-guides">its food pyramid</a>, suggesting Americans should generally avoid them. But more recent research revealed that telling Americans not to consume fat, while paying less attention to their intake of sugar and processed carbohydrates, steered waistlines in the wrong direction.</p><p>Fat is a stable source of energy, and, unlike sugar, it won't necessarily make you fat. It keeps people <a href="http://www.businessinsider.com/eggs-egg-healthy-cholesterol-yolk-whites-2018-1?r=UK&amp;IR=T">full</a> and helps the body <a href="http://www.businessinsider.com/eating-fat-wont-make-you-fat-gain-weight-says-doctor-2017-11">absorb vitamins and minerals</a>. Plus, it helps <a href="https://www.health.harvard.edu/staying-healthy/the-truth-about-fats-bad-and-good">nerves and cells</a> stay healthy. There's some evidence that certain fats may even keep us from getting fat: recently, full-fat dairy products were found to <a href="https://link.springer.com/article/10.1007%2Fs00394-012-0418-1">potentially help prevent obesity</a>.</p><p>But fat's recent reputation boost has created some confusion for consumers. Is it alright to put cream in your coffee and fill the fridge with butter and other full-fat products? </p><p><div class="KonaFilter image-container display-table float_right"><div><div class="image on-image"><img src="https://static-ssl.businessinsider.com/image/50c7b1bdecad04ee0600000c-1000/fat-9.jpg" alt="Fat" data-mce-source="Shutterstock" /><p class="source"><span>Shutterstock</span></p></div><p></p></div></div></p><p>Unfortunately, there's no one-fat-fits-all answer to that question, and more conclusive research on dairy is needed. But when you're choosing which foods to buy at the store, here are the important points to know:</p><h2>Dairy fat isn't inherently good or bad for you</h2><p>Many nutrition experts agree that focusing on specific fat, calorie, or protein numbers instead of prioritizing whole foods and healthy eating patterns can miss the larger point of nutrition <keyword id="41551" type="ENTERTAINMENT" weightage="100" keywordseo="science">science</keyword>. </p><p>Dairy fat isn't inherently good or bad, but it can serve an important function in a balanced diet. Fatty foods take longer to break down inside your stomach, so products with some natural fat will likely <a href="http://www.businessinsider.com/why-low-fat-light-ice-cream-bad-unhealthy-2018-2">keep you full for longer</a>.</p><p>Yale nutrition expert David Katz said that when people ask him whether they should pick low-fat versus non-fat products, he gives a shrug.</p><p>"My preferred answer is: Who cares?" Katz told <a href="https://www.knowablemagazine.org/article/health-disease/2017/balance-not-carbs-or-fat-key-healthy-eating?intcmp=trendmd">Knowable Magazine</a> last year. "The fat amount doesn't seem to make a difference. What really matters: Are the foods wholesome, are they arranged sensibly, and is there a balance? You can achieve all of that with high- or low-fat intakes."</p><p>Registered dietitian <a href="https://sharonpalmer.com/">Sharon Palmer</a>, author of "The Plant-Powered Diet," told Business Insider that recent scientific findings on the benefits of fat aren't a good reason to throw caution to the wind. Palmer said people should not overindulge in rich dairy treats, especially any with added syrups or sugar. </p><p>"Research on dairy fat has gotten people confused, and they think that it's 'better' to eat these indulgent dairy products," Palmer said in an email. "Excess calories lead to weight gain, which leads to health problems. We must keep this in mind."  </p><p>Still, a <a href="http://www.thelancet.com/journals/landia/article/PIIS2213-8587(15)00367-8/abstract">2015 review</a> of 53 studies found that among more than 68,000 dieters, those who tried low-fat diets weren't as good at keeping weight off for periods longer than a year. The researchers warned, however, that their findings did not indicate that adding fat into your diet is the answer to lasting weight maintenance. </p><p>"<span>We need to look beyond the ratios of calories from fat, carbs, and protein to a discussion of </span>healthy eating<span> patterns, whole foods, and portion sizes," author Dierdre Tobias <a href="https://www.hsph.harvard.edu/news/press-releases/low-fat-diet-not-most-effective-in-long-term-weight-loss/">said when the meta-study came out</a>. </span></p><h2>As is the case with most types of food, not all fats are created equal</h2><p>Here's what the latest research shows:</p><ul><li><strong>You're probably eating more than enough fat, but it may not be the best kind for your body.</strong> A <a href="http://www.pewresearch.org/fact-tank/2016/12/13/whats-on-your-table-how-americas-diet-has-changed-over-the-decades/">2016 Pew Research Center study</a> showed that Americans have almost doubled the amount of fat and oil in their diets since the 1970s. In fact, we're eating more of almost every kind of food these days, with the notable exceptions of <a href="http://www.pewresearch.org/fact-tank/2016/12/13/whats-on-your-table-how-americas-diet-has-changed-over-the-decades/">healthy veggies and eggs.</a></li><li><a href="http://www.pewresearch.org/fact-tank/2016/12/13/whats-on-your-table-how-americas-diet-has-changed-over-the-decades/"></a><a href="http://www.pewresearch.org/fact-tank/2016/12/13/whats-on-your-table-how-americas-diet-has-changed-over-the-decades/"></a><strong>Trans fats <a href="https://www.annualreviews.org/doi/full/10.1146/annurev-publhealth-031811-124646">are hyper-processed oils</a> that should be avoided</strong>. Solid-state vegetable oils are laboratory-heated to prevent spoilage (they often show up in nutrition labels as "partially hydrogenated oil"). These types of fats were once commonly used in deep-fryer oils, margarines, and packaged foods from frozen pizzas to cookies. But manufacturers are starting to avoid them, since trans fats raise our bad LDL cholesterol levels while lowering the good kind of HDL cholesterol. Researchers estimated that during the heyday of trans fats in the 1990s, they led to roughly <a href="http://www.businessinsider.com/fda-bans-trans-fats-2015-6">50,000 preventable deaths</a> every year in the US. The FDA is in the process of <a href="https://www.fda.gov/Food/IngredientsPackagingLabeling/FoodAdditivesIngredients/ucm449162.htm">rolling out a ban</a>: companies have until June 18, 2018 to stop using trans fats.</li><li><strong>It's good to limit saturated fats from things like red meat, coconut oil, and cheese.</strong> Some <a href="http://bjsm.bmj.com/content/51/15/1111">cardiologists have suggested</a> that saturated fat isn't the artery clogger it was once thought to be, but research suggests most people are still <a href="http://www.businessinsider.com/coconut-oil-not-healthiest-best-oil-2017-6">better off nibbling limited doses</a> of these foods. </li><li><strong>There are some very good fats out there. </strong>Avocados, nuts, fish, and olive oils all have high levels of monounsaturated fats, which can <a href="https://www.ncbi.nlm.nih.gov/pubmed/10584045">actively lower your cholesterol</a>. They're also staples of the <a href="http://www.businessinsider.com/best-diet-body-brain-healthiest-2017-7">Mediterranean diet</a>, which is increasingly touted as one of the best for staying healthy. </li><li><strong>"Everything in moderation" is still good advice.</strong> According to Palmer: "We must keep in mind that fat is very concentrated. Just one tablespoon of oil provides about 120 calories." Those calories can add up quickly and contribute to weight gain if you're not mindful of portion sizes, she said. </li><li><strong>It's fine to have fat in your diet as long as you don't use it as an excuse to eat sugar.</strong> "If you really love a higher-fat yogurt and you have a healthy weight, then I think you can easily fit this in a healthful, balanced diet," Palmer said. "But you might want to keep an eye on sugar levels, which we should be limiting."</li></ul><p><div class="KonaFilter image-container display-table float_right"><div><div class="image on-image"><img src="https://static-ssl.businessinsider.com/image/5ab015dd1225bc31008b4aa5-1821/1287318362359a2e920c8k.jpg" alt="salmon lunch salad food vegetables healthy yum egg meal plate" data-mce-source="Flickr/HarshLight" data-link="https://www.flickr.com/photos/harshlight/12873183623/" /><p class="source"><span><a href="https://www.flickr.com/photos/harshlight/12873183623/">Flickr/HarshLight</a></span></p></div><p></p></div></div></p><h2>Finding a healthy, balanced diet is key</h2><p>The best fats come from whole, nutrient-rich foods, and are just one part of a sustainable healthy diet. Most researchers agree that the trick to good eating can't be summed up as an eat-this-not-that rule. </p><p>Instead, science suggests that your best bet is to eat a variety of fiber-rich veggies, digestion-aiding whole grains, and, yes, some fats. </p><p><a href="http://www.businessinsider.com/best-diets-for-health-dash-and-mediterranean-diet-2018-1">Study</a> after <a href="http://www.businessinsider.com/best-diet-body-brain-healthiest-2017-7">study</a> has revealed the benefits of the Mediterranean diet, which encourages eating fatty fish like salmon as well as nuts, olive oil, beans, lots of vegetables, and lean proteins. </p><p>Cardiologist Aseem Malhotra said in a <a href="http://bjsm.bmj.com/content/51/15/1111">BMJ podcast</a> last year that adopting a Mediterranean diet that's high in fat and low in refined carbs is part of a 3-pronged health approach that's "more powerful than any drug."</p><p>The other two components: a solid daily dose of movement or exercise, and keeping your stress in check.</p>    <div class="margin-top">        <h3>NOW WATCH: <a href="http://www.businessinsider.com/best-time-eat-carbs-so-they-dont-turn-into-fat-2017-6">The best time to eat carbohydrates&#xa0;so that your body uses them up instead of storing them as fat</a></h3>        <div>            <iframe class="bijwplayerclass" data-player="jwplayer" src="https://content.jwplatform.com/players/qAPwSGoF-CEZHWCBG.html" width="100%" height="100%" frameborder="0" scrolling="auto" style="margin:0px;" allowfullscreen=""></iframe><script>function receiveMessage(event){ console.log(event.data.fullscreen); Android.fullscreen(event.data.fullscreen); }window.addEventListener("message", receiveMessage, false);</script>        </div>    </div>

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