Why should Delaware care?
Hospital costs in Delaware are some of the highest in the nation, which impacts residents’ pocketbooks and the state’s, with its obligation to fund Medicaid and retiree benefits. In response, Delaware lawmakers last year created the Diamond State Hospital Cost Review Board with the authority to veto hospital budgets if they deemed them excessive. But that authority has opponents saying it damages Delaware’s chief brand as a regulator of corporate governance.
A powerful Delaware finance committee on Tuesday approved language to go into the state budget that would pause funding to a controversial board tasked with reining in health care costs at hospitals – including at Delaware largest and most politically influential one, ChristianaCare.
The very existence of the health care board, which ChristianaCare has asserted threatens its mission to provide services, was already in limbo after the hospital system sued the state last summer over the constitutionality of a law that created the board and granted it the authority to veto hospital expenses it deems excessive.
ChristianaCare’s lawsuit followed a failed lobbying effort last spring from hospital boards and administrators, who flooded Dover wearing white coats in efforts to oppose the board, formally called the Diamond State Hospital Cost Review Board.
The lobbying campaign continued last week when a group of nonprofit organizations, including the Delaware Healthcare Association, jointly sent a letter to all lawmakers urging them to postpone the implementation of the state health care board for one year.
In the letter, they said that $2.5 million is needed to make the board operational and implement its regulations, and claimed the money is “better spent stabilizing nonprofits or preserving Medicaid coverage.”
On Monday, a coalition of state worker unions sent a competing letter, calling on the legislature to “reject the Delaware Healthcare Association’s latest request to delay the Board’s work.”
An answer to the lobbying came Tuesday when a state budget committee — called the Joint Finance Committee — inserted language into the epilogue section of the state operating budget, directing funding to the board to be cut until “current litigation” is resolved.
With potential appeals, ChristianaCare’s lawsuit against the state could last well more than one year.
During the Tuesday meeting, the chair of the Joint Finance Committee, Rep. Kim Williams (D-Stanton), cited what she said was “transparency” and “public trust” as reasons to pause funding.
”I think we owe it to the taxpayers to make sure that we are not using funds,” she said. “There is a current lawsuit.”
Williams’ remarks during the meeting came in response to Sen. Laura Sturgeon (D-Brandywine Hundred), who said the decision to pause the funds gave her “some heartburn.”
Sturgeon said the health care board was designed to bring down what she called Delaware’s unsustainably high health care costs, “so that our public sector workers would be able to afford their health care in the future.”
Later, on Wednesday, Williams told Spotlight Delaware that her decision to pause the funding wasn’t influenced by lobbying. Instead, she said the state should not continue to pay to implement a board “whose future is so uncertain.”
The Joint Finance Committee’s action came four days after a Delaware judge ruled that ChristianaCare’s lawsuit challenging the board could proceed.
Touching on Delaware’s corporate-friendly ethos, the judge said the question of whether the state board’s authority over hospital budgets unconstitutionally usurps a hospital board of directors has merit.
“In Delaware, the managerial power of boards of directors is sacrosanct,” the judge, Vice Chancellor Lori Will, said.
In a statement issued following the ruling, ChristianaCare officials said their lawsuit is “necessary to preserve independence in clinical decision-making, protect critically necessary hospital services and resources, ensure nonprofit board autonomy and sustain a strong health care delivery system.”
In response to the Joint Finance Committee’s decision to pause funding for the health care review board, Senate Majority Leader Bryan Townsend linked the lawmakers’ decision to recent lobbying, saying that “hospital leaders have spent tremendous energy and resources fighting against transparency.”
“I urge them to spend a fraction of that energy and resources to actually partner with lawmakers on progress,” Townsend said.
Like Sturgeon, Townsend also claimed that health care costs in Delaware are unsustainable.
When asked, he did not say whether he would ultimately vote against the budget bill if the cost-cutting language remains within it.
