DOVER – Lawmakers unveiled legislation on Tuesday aimed at managing the alarming rise of healthcare cost growth by establishing greater oversight of hospitals.
Sponsored by House Speaker Valerie Longhurst, HB 350 would address Delaware’s escalating hospital spending by creating the Diamond State Hospital Cost Review Board. The board would be tasked with ensuring that any changes to hospital budgets align with the State’s health spending benchmarks and the healthcare needs of Delawareans.
“Year after year, we’ve witnessed concerning spikes in healthcare costs, reaching levels that pose a serious threat to both our state budget and the well-being of our constituents,” said Speaker Longhurst.
“Establishing this review board is a critical step to managing the rise in healthcare spending, ensuring we strike a balance that controls costs while guaranteeing quality healthcare for Delawareans.”
Delaware consistently ranks among the most expensive states for healthcare and the continuously increasing costs could strain the state’s budget, diverting resources from other important investments.
Anticipated for fiscal year 2025 is a 27% increase in state employee premiums. Governor Carney’s proposed budget includes an additional $200 million to cover the state’s share of the premium hike and fund the fiscal year 2024 deficit in state employee healthcare.
“Rising healthcare costs are having a real impact on Delaware families, and state taxpayers,” said Governor Carney.
“My recommended budget includes more than $2 billion in health care spending alone – $200 million more than last year. Those kinds of cost increases are just not sustainable. Working together, we can take action that lowers health care costs for Delaware families and taxpayers, while protecting and improving health care quality. If we fail to address this issue, health care spending will crowd out funding for public schools, affordable housing, child care, and other priorities important in the lives of Delawareans. That’s just a fact.”
Under HB 350, hospitals would be required to submit their proposed budget as well as financial and utilization information to the Diamond State Hospital Cost Review Board on an annual basis.
Beginning in 2026, the board would be responsible for reviewing and approving hospitals’ budgets, taking into consideration the State’s healthcare spending benchmarks, the financial health of each hospital, and other economic factors.
The board would consist of five members, appointed by the Governor and the General Assembly, with knowledge of health care policy, health care delivery, or business, finance, or accounting expertise.
“Right now, Delaware is in the top five of states in terms of healthcare costs and in the bottom half when it comes to healthcare results,” said Senate Majority Leader Bryan Townsend, the Senate prime sponsor of House Bill 350.
“Just as utilities operating in Delaware are required to justify hikes in water, electric and cable rates, our hospital systems also should be held accountable for the fees they charge and the outcomes they produce,” he said.
“I applaud and thank Speaker Longhurst for introducing transformational legislation that will represent a major step forward in our work to create a healthcare system that is affordable and focused on keeping our neighbors healthy.”
As a temporary measure until the board begins operations, hospitals would be prohibited from charging more than 250% of Medicare costs to any payer for hospital services in 2025.
HB 350 has been assigned to the House Administration Committee.