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Bill to establish hospital cost review board faces backlash from healthcare community.

Beebe Healthcare
Beebe Healthcare

Legislation to create a hospital cost review board in an attempt to lower healthcare costs is introduced, but members of the healthcare community strongly oppose it.

House Speaker Valerie Longhurst's (D-Bear) legislation would establish the Diamond State Hospital Cost Review Board, which would begin reviewing and approving hospital budgets in 2026.

The board would consist of 5 members, 3 appointed by the governor, one appointed by the speaker of the House of Representatives and one appointed by the president pro tempore of the Senate.

The bill is modeled after a similar structure in Vermont, which Delaware Healthcare Association (DHA) said in a statement is a "failing approach." The release from DHA goes on to say "eleven of the fourteen hospitals operate in debt while having the nation’s fifth highest cost of care. Vermont’s quality of care has deteriorated over the years that this model has been in place."

In her opening statement on the bill during its hearing in the House Administration Committee, Longhurst refuted these claims, saying Delaware's healthcare costs far exceed Vermont's.

"The profit per patient in Vermont is only $1,075, nearly half of what Delaware's cost. The breakeven is 122% matching the national average and 43% lower than Delaware. More of that money is being spent on direct patient care labor hours than in Delaware too," she said. "Vermont has been able to lower healthcare costs without compromising quality or access with a model very similar to the board we are proposing today."

Longhurst explained the state set a spending benchmark for hospitals in 2018, and since then, the benchmark has only been met once in 2020. In other years, spending has been double the benchmark, and sometimes 3 or 4 times greater.

She argues healthcare providers and insurance companies are the only parties involved in setting healthcare rates, and they have failed to disclose the factors that contribute to their decisions.

“When we have asked over the years from either one of [healthcare providers or insurance companies], we get nothing, but they expect the state to continue to pay for that and our constituents in our district to pay those high costs, without giving a reason why," Longhurst said. "This bill is important because it will open the transparency, and we will be able to see where those costs are coming from and where we need to go from there.”

During public comment on the bill, several area healthcare system executives expressed concerns over the restrictiveness a political review board would create compared to their current review boards.

“Our board members are closest to what our community needs are in the healthcare system, and our clinicians who are closest and the truest subject matter experts on what our needs are from a technology, growth, strategy perspective. They are the one's who know best," Bayhealth President and CEO Terry Murphy said, who asked Longhurst to work with the hospitals in finding a solution instead of establishing the independent review board.

"We have to be able to compete. We have to be able to bring those quality physicians because the people throughout Delaware, same as in Sussex — they're all the same — need to have access to high quality of care. So that's where my concerns come when you talk about some of these restrictions," President of TidalHealth Nanticoke Penny short said.

Additional representatives from Beebe Healthcare, ChristianaCare and Nemours Children Health all spoke in opposition of the bill, while RISE Delaware, the Delaware State Troopers Association and the Delaware State Education Association spoke in favor.

During the hearing, public comment was cut short due to time constraints, and House Minority Leader Mike Ramone (R-Pike Creek South) made an effort to table the bill, but the motion failed.

The legislation was ultimately released from committee on a party-line vote and will now go to the House floor for a full vote.

Before residing in Dover, Delaware, Sarah Petrowich moved around the country with her family, spending eight years in Fairbanks, Alaska, 10 years in Carbondale, Illinois and four years in Indianapolis, Indiana. She graduated from the University of Missouri in 2023 with a dual degree in Journalism and Political Science.