Weekend Economists: See the Kittehs! May24-27, 2013

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49. Maryland pressing for expanded powers over hospitals

http://www.washingtonpost.com/business/economy/maryland-pressing-for-expanded-powers-over-hospitals/2013/05/24/8adf92fe-b8c1-11e2-b94c-b684dda07add_story.html

In a world of constantly rising health-care costs, Maryland has long stood alone. Through a novel system that gave regulators unusual leverage to set prices, the state delivered care at a price that grew slower than elsewhere in the country — even at some of the nation’s most renowned hospitals.

But after saving an estimated $45 billion for consumers over four decades, the system is in danger of running aground. Hospital expenses have risen so relentlessly in recent years that the original price controls now appear unsustainable.

In its place, Maryland officials are pressing for an expansion of the state’s authority over its hospitals. The new system would not only set prices for the procedures they perform but also cap the growth in their overall spending.

The proposal has ignited a debate in Annapolis and beyond over how far the government should go in reining in sky-
rocketing health-care bills. Advocates for the plan say it is the most effective way to curb costs and that it could serve as a model for the rest of the country.