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WMHS revenue model gets national notice

September 8th, 2013 by WCBC Radio

The Cumberland Times News reports following a recent New York Times article, the Western Maryland Health System has received widespread attention for the success it has achieved utilizing a revenue model that has generated profits for the medical provider while offering increased outreach health care for its patients. Since 2010, the WMHS, along with 10 other rural Maryland hospitals, has been participating in a revenue model known as Total Patient Revenue. The model allows the state’s Health Services Cost Review Commission to set price controls, also known as a guaranteed budget, for the care administered to patients. Since the hospital will receive what amounts to a flat fee, the system spurs innovation as the hospital finds ways to keep health care costs within those pricing reimbursements set by the model. The Total Patient Revenue model has created benefits on many levels. Hospitals that keep their costs under the pricing budget, get to keep the profits. Barry Ronan, the chief executive for WMHS, told the New York Times writer Eduardo Porter that as of the fiscal year ending in June, WMHS made an operating profit of $15 million on about $370 million in revenues. That yields a 4 percent return that dwarfs the average return of Maryland hospitals which is around .08 percent.

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