Maryland’s unique financing system, the Total Cost of Care Model, acted as a shock absorber to the early effects of the COVID-19 pandemic.

Yet, hospitals are not protected from events that have led to a “perfect storm” of financial challenges—record inflation for supplies, drugs, and equipment, as well as overwhelming labor costs.

As a result, Maryland hospitals’ median operating margin was negative for 12 of the last 14 months. The latest monthly median margin was negative 1.4%. This compares to pre-pandemic margins of 2% to 3% on average.

Maryland hospitals are at a breaking point and are having to do more with less. This is simply unsustainable.

In this month’s issue of MHA Insight, we examine these extreme financial pressures and ask that policymakers help by rebuilding the hospital workforce and easing pricey regulatory burdens on hospitals.

Maryland’s challenges mirror national data showing that last year was the worst financial year for hospitals and health systems since the start of the COVID-19 pandemic.

Our hospital rate-setting system, unique in the nation, sets prices across all payers and fixes the amount of revenue each hospital may take in. Over the past few years, the state has been unable to adjust rates in line with inflation—underfunding hospitals an estimated $600 million annually in the last two years.

This new data is being used in our advocacy efforts to convey the pressures facing your hospitals and health systems. MHA’s government affairs team is meeting with every member of key committees in Annapolis to shine a light on the unprecedented financial strain you are under.

Your voice can help amplify the message. We encourage you to reach out to your representatives to tell your story and share the impact these losses have on hospital operations—and eventually on patient services and programs.

Please reach out to Nicole Stallings for more information and talking points to help you tell this story.