Delaware Hospitals Resist Spending Oversight Bill

TL/DR –

Delaware’s House of Representatives has proposed a bill that would create a state board to oversee hospital spending and control health care costs. The Diamond State Hospital Cost Review Board would approve annual hospital budgets from 2026, using a variety of criteria such as state health care spending benchmarks and financial health of each facility. However, healthcare groups like the Delaware Healthcare Association oppose the bill, stating that it could harm patient care and fail to control costs, and arguing that multiple healthcare stakeholders need to work together to contain costs.

Delaware Health Care Groups Resist Hospital Spending Oversight Bill

A recently proposed bill aiming to regulate hospital spending is facing backlash from health care organizations in Delaware. House Substitute 1 for House Bill 350, sponsored by Speaker of the House, Valerie Longhurst, D-Bear, seeks to establish the Diamond State Hospital Cost Review Board. The board will scrutinize and approve annual hospital budgets starting from 2026. As a temporary measure until the board takes effect, hospitals will be required to not exceed 250% of Medicare costs for services in 2025. (legis.delaware.gov)

The board will assess proposed hospital budgets considering state health care expenditure benchmarks, financial health of hospitals and other factors like operational costs, contract details, scope of services, and a comparative analysis of costs with other Mid-Atlantic hospitals.

The Delaware Healthcare Association has voiced its disagreement with the proposal. The organization’s President and CEO, Brian Frazee, stated that the bill overlooks the collective role of insurers, government, practitioners, medical device and pharmaceutical companies in controlling health care costs. He emphasized the potential risk of transferring decision-making power to a board versus the current community-led hospital boards. (deha.org)

Terry Murphy, president and CEO of Bayhealth, also warned against the measure. In a letter to community members, he urged Delaware residents to express their opposition to the legislation. He expressed concern that the bill would entrust key hospital operations to political appointees, stripping authority from community leader boards.

Despite the opposition, Speaker Longhurst asserts that the bill is a crucial step in managing the rise in health care spending. Senate Majority Leader Bryan Townsend, D-Newark, also supports the bill, stating that just like utilities, hospitals should justify their fees and health outcomes. (legis.delaware.gov)

House Substitute 1 for House Bill 350 is scheduled for a hearing during the House Administration Committee meeting. In Governor John Carney’s proposed budget for 2025, health care expenses account for $2 billion of the $6.1 billion plan. (governor.delaware.gov)

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