Hospital cost review board passes Delaware Senate

According to a news release from Delaware Health and Social Services earlier this month, health care spending in Delaware increased by 6.3% in 2022, outpacing the 3% growth rate benchmark. The previous year saw an 11% increase as more people resumed health care visits they had put off during the pandemic.

“The 6.3% per capita increase in 2022 is significant, but there was an expectation of some continuing health care spending rebound effect in the post-pandemic period,” the news release said. “Moving forward into 2023 and beyond, DHSS expects Delaware’s health care market to be in a steadier state.”

Carney set a spending benchmark in 2018, which was an aspirational goal for annual per-capita-rate health care spending growth. The 3.8% benchmark took effect in 2019. It’s since fluctuated to various percentages below 4%.

Once up and running, the review board would review each hospital’s budget annually. If a hospital failed to meet spending benchmarks, it would be required to develop a performance improvement plan. Once a hospital met spending targets for three consecutive years, the board would release it from the performance plan oversight. When a hospital successfully meets its budget goals for three consecutive years, it would no longer be required to participate in the budget approval process.

“This legislation is not about punishing hospitals, but rather ensuring our constituents are able to access quality and affordable health care and to put a system into place to slow down the skyrocketing costs that we have experienced in Delaware,” House Speaker Valerie Longhurst said during a debate in the House.

Advocates of the legislation say hospitals are the primary driver of higher costs. However, DHA President and CEO Brian Frazee has argued pharmacy drugs and long-term care are more significant cost drivers than hospitals.

Senate Minority Whip Brian Pettyjohn, R-Georgetown, said he was concerned about an “attack on hospitals” and that the hospitals were forced to come to the table after being backed into a deal.

“It disturbed me greatly when one hospital had told me two days ago that before House Bill 350 was introduced, no one from the General Assembly, not from this chamber, not from the other chamber, picked up the phone and called them to discuss and understand hospital costs,” he said. “Not one. Is this a collaboration? Is this a partnership? Not in any definition that I’m familiar with.”

The bill heads back to the House for approval of the Senate amendment, where it passed 21-16 on a near party-line vote, with three Democrats voting in opposition. If the House signs off and no other changes are made, it will then head to Gov. John Carney’s desk.