By Joseph Edelen

DOVER — Since the introduction of a proposed hospital cost review board in March, the Delaware Healthcare Association has warned medical workers that their jobs could be at risk.

The association – which represents Delaware’s hospitals and health systems – have claimed the legislation would slash more than $360 million in hospital resources statewide, resulting in a loss of as many as 4,000 jobs and negatively impacting access to care and quality.

Democratic leaders in the General Assembly have fiercely advocated for the bill and championed the proposal as a way to control rising health care costs, provide oversight to hospital spending, and ensure better care is provided to Delawareans.

Consideration of the contentious bill led hundreds of medical workers to travel to Legislative Hall on Tuesday to oppose the legislation, House Substitute 2 for House Bill 350.

Bayhealth president and CEO Terry Murphy — along with Janice Nevin of ChristianaCare, Mark Marcantano of Nemours and Penny Short of TidalHealth Nanticoke — has been in Legislative Hall voicing opposition.
Delaware Healthcare Association president and CEO Brian Frazee said the bill would have a “catastrophic impact” on hospitals.

Meanwhile, the Bayhealth executive told the Daily State News that he was thankful for a new legislative effort to address potential cuts to hospital programs and workforce.

This effort is House Bill 395, sponsored by House Majority Whip Kerri Evelyn Harris, D-Dover, which would address a provision in House Bill 350 related to hospitals’ price cap for services covered by the Medicare program by replacing it with a more flexible figure based on the regional consumer price index.
Democratic lawmakers noted that this change was the result of negotiations with Delaware hospitals, though the issue is just one component of opposition to the legislation.

“(House Bill 350) would definitely have an immense impact all the way around, and we do appreciate Reps. Harris and (Bill) Bush proposing something related to the cuts, and that’s just one piece,” said Mr. Murphy. “This idea of the government approving our budgets, from a fiduciary standpoint, from a corporate governance standpoint … they don’t do this for any other industry in the state of Delaware.”

The fundamental issue for Mr. Murphy and other members of the Delaware Healthcare Association is replacing the current governance system of hospitals – which includes boards comprised of several health care experts and community leaders – with the Diamond State Hospital Cost Review Board.

The proposed state board would feature eight members; the Delaware Healthcare Association president as a nonvoting member and seven governor-appointed members with “knowledge in health care policy, health care delivery, or business, finance or accounting.”

“It’s just really a challenge for the people who are really good fiduciaries to hospitals to think (a state board) would be a better way (to determine budgets), and they would acquiesce that fiduciary responsibility to the state government,” Mr. Murphy said.

Despite hospital leaders’ opposition to the bill, Democratic leadership has continued to advocate for the bill.

Prior to its hearing Wednesday, prime sponsors Speaker of the House Valerie Longhurst, D-Bear, and Senate Majority Leader Bryan Townsend, D-Newark, said House Bill 350 was not the first time that members of the legislative or executive branch have attempted to work with hospitals on a solution to rising costs.

“No one should think this is our first or only attempt to rein in hospital pricing. While the Carney administration worked with Delaware’s largest hospital systems for years, they continued to blow through benchmarks with abandon. Delaware hospitals now rake in significantly more profit than the national average, while the First State is consistently ranked in the top 10 most expensive states for health care,” the lawmakers said in a statement.

“Our communities simply cannot afford to accept rising health care costs with stagnant health care outcomes.”

Throughout the consideration of House Bill 350 in the General Assembly, Mr. Frazee noted that by pinning hospitals’ budget growth to the state’s spending benchmark, it could handicap their ability to invest in existing workforce and recruitment initiatives, innovation and capital improvement projects.

During House Bill 395’s committee hearing Wednesday, Rep. Harris noted that the change would benefit hospitals in Kent and Sussex counties, which would have been “disproportionately impacted” without the bill.

These counties are home to the lowest physician-to-population ratio in the state, Mr. Murphy said, adding that Kent has the highest percentage of physicians over the age of 65.

If the bill becomes law with its companion, Rep. Harris said it will allow hospitals to grow their budgets from their current position at a more sustainable pace.

“If you just look at a cap and you don’t really understand what’s happening (at the hospitals) … it can be problematic if you’re just focused on the dollar,” Mr. Murphy said, comparing the current hospital governance structure with the proposed state board.

The Bayhealth president said he was hopeful that “cooler heads will prevail” in the contentious debate surrounding House Bill 350 and a more collaborative approach will be taken.

Meanwhile, Rep. Longhurst and Sen. Townsend said they will continue to engage with hospitals on a daily basis as the bills continue their trajectory in the legislative process.

House Bill 350 is expected to receive a vote on the Senate floor later this month, while House Bill 395 is on the ready list and awaits consideration from the full House of Representatives.