Speaker of the House Valerie Longhurst, D-Bear.

Photo courtesy of legis.delaware.gov

Brian Frazee, president and CEO of Delaware Healthcare Association

Photo Courtesy of deha.org

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Legislative Hall
411 Legislative Ave.
Dover, DE 19901
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By Joseph Edelen

DOVER — A controversial bill that aims to provide state oversight to hospital spending will be heard in the Senate Executive Committee today at 4 p.m.

House Substitute 2 for House Bill 350, which is being led by Speaker of the House Valerie Longhurst, D-Bear, and Senate Majority Leader Bryan Townsend, D-Newark, heads to its next step in the legislative process after receiving passage by the House of Representatives on April 25.

Under the proposal, the Diamond State Hospital Cost Review Board would be established and comprise of six governor-appointed members and the executive director of the Delaware Healthcare Association.

The legislation has been substituted twice since its March 12 introduction; the latest version of the bill exempts rehabilitative hospitals, alters board membership, and for hospitals that fail to meet the state’s spending benchmark, it would add a performance improvement plan requirement.

Hospital stakeholders and Republicans in the General Assembly have pushed back on the proposal due to a number of factors, such as its mirroring of a similar board in Vermont.

The measure does have support from a number of Democratic lawmakers in the General Assembly, as well as state workers’ unions, who have touted its ability to provide transparency related to health care spending and control its rapid growth in the state.

In a recent Daily State News commentary from union leaders in the state — which included the Delaware State Troopers Association and Delaware State Education Association – it was noted that Vermont’s board saved residents $108 million in taxpayer dollars after its establishment.

Additionally, inpatient health care services are 281% more than Medicare in Delaware, while outpatient care is 369% higher, they said.

Delaware Healthcare Association president and CEO Brian Frazee has been on the forefront of opposition to the bill, noting that its 250% Medicare cap on commercial reimbursement will cut resources by $360 million across Delaware’s five non-profit hospitals.

Mr. Frazee has also warned that the board could result in a loss of about 4,000 Delaware hospital jobs, the closure of hospital services, and lost investment in “critically important community support programs.

That was underscored by Senate Republicans in a statement on Friday, who also echoed concerns related to the proposal.

“We strongly oppose HB 350 and the government’s intended takeover of hospitals’ budgets,” the Senate Republican caucus wrote. “Rarely has the government imposed stronger restrictions or, in cases like this, directly interjected itself into the private industry and improved the conditions it wished to correct. This will no doubt hinder or, worse, destroy Delaware’s non-profit hospitals.”

The measure will be considered during the executive committee hearing in the Senate chamber. The committee consists of Senate leadership, as well as. Sarah McBride, D-Wilmington, and Marie Pinkney, D-Bear.