The Maryland Comptroller’s Office report issued in April 2026 entitled Maryland Industry Analysis: Healthcare and the Economy concluded:
Maryland’s health care sector has become the state’s most reliable source of job growth – but growth in health care is fundamentally different from growth in other private‑sector industries. Policymakers should resist the temptation to treat industry growth as an unqualified economic win.
There is cause for optimism: Health care creates jobs across every corner of the state, and growth in ambulatory care, primary care, and home health signals a shift toward more efficient, higher-quality, community-based care – exactly the direction that the Maryland Model is designed to encourage. For many communities, particularly rural ones, a growing health care sector is among the few sources of stable employment available.
But the costs are substantial and often obscured. Health care growth drives up spending and crowds out budgets, investments, and spending in other areas by governments, employers, and individuals alike. About half of health care spending is publicly financed. Maryland’s dependence on federal health care dollars adds another layer of vulnerability for the state’s hospitals, workforce, and coverage markets to federal policy and funding decisions. There is only so much the state can do to compensate for federal health care cuts. Further, its multiplier effect on the broader economy is limited compared to industries like manufacturing or professional services.
Finally, expansion in health care does not necessarily signal a healthy economy. In fact, historically, health care employment tends to be very stable during economic downturns – increasing in some cases -, when the rest of the economy contracts. Much of what looks like sector vitality is actually a reflection of an aging population, rising chronic disease, and growing behavioral health needs – demand driven by hardship, not prosperity.
Not all growth in health care is good, but the state and the industry are thinking about how to grow it smarter. Several promising opportunities may be key to addressing the challenges discussed in this report:
Workforce Development: The Maryland Departments of Labor, Aging, and Health are collaborating on workforce programs designed to grow the pipeline of health care workers and better align training with where demand is heading. And the Rural Health Transformation Program directly addresses one of the report’s most persistent findings: that workforce shortages are most acute – and most consequential – in rural Maryland, where access to care is already limited. Two potential opportunities that health care and labor leaders are considering: (1) improve practitioner retention and reduce burnout by expanding telehealth (which would allow practitioners to practice remotely);
(2) encourage more men to enter the female-dominated health care industry, similar to efforts that have been made to encourage more women to enter male-dominated fields like STEM. Other than physicians, men represent about 20% of health care employment, and of all jobs created this year, about 75% were filled by women, driven by growth in health care which is majority female.
- Cost Savings: The Maryland Model, Maryland’s Primary Care Program, and the Episode Quality Improvement Program (EQIP) represent a deliberate bet on prevention over treatment – investing upstream in community-based care to reduce costly hospitalizations and improve long-term health outcomes. The state has the opportunity to improve value-based care models by enhancing incentives and extending them to other care settings (i.e., other subsectors).
If successful, these programs could bend the cost curve while improving care quality, a rare combination in health policy. Drugs that help improve patients’ health status, like GLP-1s, could also deliver cost savings to the health care system. - Productivity: One of the most consequential opportunities, albeit the least certain, is AI. For decades, health care has been stubbornly resistant to the productivity gains that have transformed other industries. AI may finally change that.
The information overload/cognitive burden that health care practitioners face today is real: medical knowledge that once took 50 years to double now doubles in an estimated 73 days. Research suggests that it would take a primary care physician 628 hours per month (21 hours a day) to review all the new literature published in high-quality primary care journals each month. AI offers a way to manage the volume and complexity of new medical research at scale.
The applications are broad: AI is being used for clinical notetaking, scheduling, insurance claims and appeals, and predictive diagnostics. For example, at Kaiser Permanente’s 21 Northern California hospitals, an AI system analyzes every patient’s vitals and charts hourly to identify those at highest risk – a system a New England Journal of Medicine study found saves more than 500 lives per year.
Unlike for prior technological innovations, like computers, health care organizations are showing great interest in AI. The industry is already adopting AI at more than twice the rate of the broader economy. The industry went from 3% adoption to among the highest of any sector in just two years – 27% of health systems now pay for commercial AI licenses.
Maryland enters this moment with genuine structural advantages: a unique payment model that has kept hospitals stable and is helping shift care to more cost-efficient settings, a highly educated and diverse workforce, and institutions of national caliber anchoring its major metro areas. The challenges – an aging workforce, federal funding uncertainty, coverage losses, and persistent inequities in the workforce – are real and require active policy responses. Health care will continue to grow. The work of the state government is to ensure that growth translates into a stronger, more equitable Maryland not a larger health care bill.
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