The economy has health insurers worried - fewer employed people means fewer members for the insurance plans. For those who provide health care, however, the impact of the economic slowdown is more indirect.
"It's true that physicians and other health care providers are generally recession-proof," said T. Michael Preston, executive director of the state medical society, the Medical and Chirurgical Faculty of Maryland. However, "any downturn plays out over the longer term in the availability of insurance." A growth in the number of uninsured can decrease revenue for hospitals and doctors.
Victor A. Broccolino, president and chief executive officer of Howard County General Hospital, said he expects hospitals to try to become more efficient by using consultants to review billing practices and by turning to efficiency experts to figure out how to get work done at lower cost.
For doctors and hospitals, general economic conditions might not loom as large as the proposal by CareFirst BlueCross Blue- Shield, the largest health insurer in the state, to convert from nonprofit to for-profit status and sell itself to a California insurer for $1.3 billion.
"This is obviously a major issue, regulatory and legislative, for the hospitals," said Calvin Pierson, president of the Maryland Hospital Association.
Doctors and hospitals have expressed opposition to, or at least strong skepticism about, the CareFirst plan, saying it could increase the number of uninsured people and that a large for-profit insurer dominating the market could cut reimbursement rates to them.
In a regulatory process expected to take 12 to 18 months, CareFirst will make its case to the insurance commissioners in Maryland and the other jurisdictions where it operates, the District of Columbia and Delaware.
In addition, legislators will be reviewing the proposed transaction. The insurance commissioner has the right, under law, to approve or reject the deal, but lawmakers are expected to hold hearings and are likely to offer bills to block the transaction or impose conditions on it.
If the deal goes through, the $1.3 billion will be paid to foundations in the states where CareFirst operates. The regulators would have to decide on Maryland's share of the $1.3 billion, and legislators would wrestle with whether the foundation supports health programs in general or is specifically aimed at providing coverage to the uninsured or those who are difficult to insure.
Apart from the CareFirst conversion plan, legislators and regulators will be looking at reforming the state's open enrollment program to provide coverage without medical exams for those with a history of health problems.
This will also be a year of taking a close look at the state's Medicaid program to insure the poor and handicapped. The health department just completed a yearlong evaluation of the program, and the state has to tell federal health officials this year whether it wants to continue the program as is, modify it or drop it.
The program has also been beset by deficit woes, so the state will be looking for ways to deliver care at lower cost. Doctors and participating health maintenance organizations have complained that the state is paying too little, and some have dropped out.
"This is a pivotal year for the program," Pierson said. "There has been chronic underfunding."
Also gathering steam is the state's most ambitious effort at covering the uninsured. The Maryland Citizens Health Initiative is refining its "health care for all" plan to offer affordable coverage to all Marylanders and expects to make it final in the spring and bring it to the legislature next year. "We hope it will be an issue in the elections this year," said Vincent DeMarco, executive director of the group.
Another key legislative issue this year is the monitoring of medical errors. The state law defining the powers of the Board of Physician Quality expires this year. A legislative study called for reforming the system of disciplining doctors. Physicians have generally defended the system.
It will be an active year for legislative and regulatory action, but things are quieter in the marketplace. There are concerns - hospitals continue to struggle with a shortage of nurses, and doctors are worried about cuts in Medicare rates - but not a rush of marketplace activity to cope with them. For several years, hospitals and doctor practices were rushing to merge, seeking to be more efficient and gain negotiating leverage with the HMOs, but the fever has passed.
"Last year, I predicted no merger activity" among hospitals, said Pierson. He was right. This year, he's repeating that prediction. "Bigger isn't necessarily better," he said. "There isn't the imperative to bulk up against payer pressure."
Broccolino said he expects hospitals to look internally for savings. For example, he said, he expects to see more hospitals outsourcing services such as labs and security.