Why Should Delaware Care?
Much of the opposition campaign for House Bill 350 in Delaware has centered around the health care industry’s concerns around the reform bill. However, the stances within the medical community are more nuanced and other influential voices have chosen to avoid the politics of lobbying Legislative Hall.
While Delaware’s health care systems succeeded in filling Legislative Hall with health care providers over several hearings related to House Bill 350 in recent weeks, two other influential groups have remained noticeably silent: health insurers and physicians not affiliated with a health system.
The First State’s hospital leaders have been united in their opposition to the bill that would create a new board of political appointees who would review hospital budgets in an attempt to curb rising costs of care.
“For doctors, the guiding principle is ‘Do No Harm.’ House Bill 350 will decimate Delaware’s health care system and cause devastating harm to Delawareans by putting decisions about access to care, quality of care and hospital staffing into the hands of a few political appointees,” ChristianaCare told visitors to its website in recent weeks.
Dozens of opponents dressed in symbolic white coats have been a powerful image in the opposition to the bill working its way toward law this session, but the majority of those physicians are senior officers in the health system’s staff. They represent just a fraction of the total licensed doctors in the First State.
While the Delaware Healthcare Association has lobbied against the bill on behalf of the boards and leaders of the state’s six health systems, the Medical Society of Delaware, which represents the interests of all licensed physicians statewide, voted to remain neutral on the bill.
Dr. Robert Varipapa, the president of the MSD and a founding partner of the Dover-based private practice Center for Neurology, Sleep Medicine and MRI, said this week that the organization chose to take a neutral stance because sizable portions of its membership both supported or opposed the bill. Instead, they chose to advance three policy objectives.
First, they wanted to see increased collaboration between hospitals and also between hospitals and physicians, whether affiliated or independent.
Second, they wanted the hospital boards to be more transparent about their budgeting decisions and what their motivations were for revenue strategies.
Third, they wanted hospital boards to consider ways to limit excess net revenue – known as profit to those outside of the nonprofit sphere – in order to help reduce costs to patients.
“Hospital facilities tend to charge very, very high fees for procedures that are orders of magnitude less expensive if you go to an independent radiology facility or independent diagnostic facility,” Varipapa said. “I think something has to be done, and it’s not just the state problem. This is a national problem that health care costs have gone through the roof in America.”
“There’s a lot of smoke and mirrors going on here in terms of diverting our attention from what the issues really are.”
Anthony onugu, united medical
Anthony Onugu, director of contracting for Bear-based United Medical, an independent accountable care organization (ACO) that offers coordinated, value-based care for patients, agreed with Varipapa. His organization is only able to drive excess net revenue if it can keep costs below the designated funding from Medicare, but about 65% of annual plan costs are eaten up by hospitals, Onugu said.
That ability is strained by the “near total dominance” of the three major health care systems – ChristianaCare, Bayhealth and Beebe Healthcare – in their home counties and the deals they have worked out with health insurers.
“What HB 350 does is shine a light on the budgetary process … If you’re going to invest health care dollars from the state of Delaware to acquire hospital systems in Pennsylvania then we should be able to question what your priorities are,” Onugu said, referring to ChristianaCare’s acquisition of two Chester County, Pa., facilities last year. “There’s a lot of smoke and mirrors going on here in terms of diverting our attention from what the issues really are.”
Onugu noted that all of Delaware’s hospital systems also operate ACOs, which requires them to work under budget benchmarks for patient care, which he argued was not very different from the state oversight proposed by HB 350.
Aside from unaffiliated doctors, however, the other industry noticeably silent in the debate has been Delaware’s commercial health insurers. Spotlight Delaware solicited feedback from Highmark Delaware, Aetna, Cigna and UnitedHealthcare on HB 350, but none would comment on the record.
If successful in curbing hospital costs, health insurers could see significant savings in their covered population costs as a result of HB 350. Those savings could potentially be returned to patients with lower insurance premiums. Yet, the bill would also provide oversight on partners for many in the health insurance industry.
The Delaware Department of Insurance, which administers the state’s annual health care insurance marketplace plan, has supported HB 350 and said it would benefit the premiums paid by the more than 115,000 insured through the state plans.
“Insurers are required to pay 80% of premiums toward health care services. And because of the majority of premiums being tied to medical expenses, when we address system costs, we lower premiums and save consumers and businesses money. We know that these prices in many cases are unjustified, up to six times higher than a non-hospital facility would charge for the same service,” said Christina Haas, senior advisor to Insurance Commissioner Trinidad Navarro, at a May 7 hearing.
