Amid funding woes and ongoing litigation, Gov. Matt Meyer taps former Secretary of Finance David Singleton to chair the Diamond State Hospital Cost Review Board (DSHCRB).
Meyer selected Singleton for the inaugural position just over a week ago, and he formally accepted the post at the board's monthly meeting on Tuesday.
The DSHCRB was legislatively created last year, forming a politically appointed body with the intent of reviewing hospital budgets statewide to ensure they are adhering closely to Delaware’s healthcare spending benchmark.
Under the enacting legislation — House Bill 350 — if a hospital fails to meet the state’s budget benchmark for increases in hospital costs, it will have to work with the board to develop a performance improvement plan.
The board has been contentious since its inception, facing fierce backlash from the healthcare community and Republican lawmakers who argue the body is governmental overreach.
The opposition has escalated into a full-blown lawsuit from ChristianaCare, which is challenging the constitutionality of the board in the Delaware Court of Chancery.
With litigation underway, state budget leaders played tug-of-war over temporarily pausing funding for the board last month, but ultimately reinstated board member salaries over constitutional concerns.
Despite the turmoil, Singleton says the board will push on, with some work already underway.
"We have a job to do, and we intend to do it. We certainly need to be mindful of litigation, which will take some time to resolve itself, but there is quite a bit of work for the commission to do," Singleton said. "One of the tasks that we are looking at is that a number of other states have similar commissions. Vermont, for example, has a similar commission, and we’re going to be taking a close look at the practices in those other states and how effective they’ve been in accomplishing the goals."
HB 350 says the submission of hospital budgets and financial information "will begin in 2025 for calendar year 2026," and the board will start to determine if a hospital's annual cost growth exceeds the spending benchmark beginning in 2026.
Singleton says budgets have not yet been submitted, but the initial review process is underway.
“We have begun by asking the hospitals to provide their audit reports, so we have those, and we will be looking at those and discussing those. We have not made a decision on the timeframe to ask the hospitals for their budgets, but we will be addressing that over the coming months.”
Singleton says the board supports "excellent healthcare" on all fronts, but the growth in spending at "unsustainable rates" cannot be ignored.
"This is a tough area in in every every state, and I was the secretary of finance 25 years ago, and it was a big issue then. There’s no question here that hospitals are doing their best to provide quality care, and it’s a real balancing act of, 'How can we get costs more in line with the benchmark without without reducing the quality of care?' And that’s going to be our challenge as we move forward," he said.
Delaware has outpaced its healthcare spending benchmark for three years in a row, nearly tripling it for fiscal year 23.
Several members of the healthcare community, and perhaps most vocally Delaware Healthcare Association President and CEO Brian Frazee, have argued its unfair that only hospitals are being held accountable for adhering to the healthcare spending benchmark when the figure factors in the entirety of the healthcare spectrum.
But proponents of HB 350 and Delaware Department of Health and Social Services Director of Healthcare Reform Steven Costantino argue hospitals make up an overwhelming chunk of healthcare spend in the First State.
“When you look at 37, 38% of the spend being on the hospital side, you can't just dismiss that. And listen, if this leads the hospitals to doing a more full assessment of the pharmaceutical industry, I have no problem with that — that's not for me to decide. But I think that you have to start somewhere," Costantino told Delaware Public Media in May.
At the board’s most recent meeting, Singleton says no action was taken and the bulk of the meeting was spent in executive session discussing the ChristianaCare lawsuit.
The DSHCRB's next public meeting is set for August 12 at 10 a.m.
