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Business opposition mounts for hospital regulation cost bill

Katie Tabeling

Beebe Healthcare has opened a new specialty surgical hospital in the last four years. The southern Delaware hospital system told the Delaware Business Times that if HB 350 passes, it could see the loss of $60 million in the span of two years. | DBT PHOTO BY KATIE TABELING

DOVER — A coalition of businesses spanning various sectors has now voiced its opposition to state lawmakers’ efforts to grant stronger oversight on hospital costs, including a consortium of CEOs throughout Delaware.

Hours before House Bill 350 was due to be heard in the Senate Executive Committee, the Delaware Healthcare Association issued a letter to the General Assembly, as well as Gov. John Carney, that warned them that the bill was not the way to reduce costs.

HB 350 would effectively create the Diamond State Hospital Cost Review Board in which seven members would review financial information from hospitals, as well as ordering hospitals to submit to performance improvement plans if their spending plans do not meet health care spending benchmarks. It would also grant the board the ability to reject or approve budgets of five hospital systems. Nemours is exempt from the 2025 reference pricing provision that caps charges until the board is formed, reflecting the mix of children and adult patients.

“This bill will have disastrous ramifications on not just the hospital systems but on the business and nonprofit communities,” the letter reads. “It is our hope that we can bring all parties together inclusive of the business community, nonprofit leaders, healthcare systems, providers, payors, pharmaceutical companies, pharmacy benefit managers, state unions, community advocates and patients to determine a strong path forward for our state. That is the Delaware way.”

The letter was signed by Bayhealth, ChristianaCare, Beebe Healthcare, Nemours Children’s Health, TidalHealth Nanticoke and Saint Francis Hospital. But it also included many chambers of commerce throughout the state, including Bethany-Fenwick Area Chamber of Commerce, the Central Delaware Chamber of Commerce, the Lewes Chamber of Commerce,  New Castle County Chamber of Commerce and Rehoboth Beach-Dewey Beach Chamber of Commerce.

Other industry groups who signed on to the letter include the Sussex County Health Coalition, Latin American Community Center, Kent Sussex Leadership Alliance and Delaware Psychological Association, as well as individual businesses like College Ave. Student Loans and Nason Construction.

The letter is the latest move in a mounting campaign against HB 350 which was introduced in mid-March by House Speaker Valerie Longhurst. For the past nine weeks, health care officials have been lobbying state leaders to reject the bill as they say it would trigger $360 million in potential cuts to health care systems across the state, as well as the loss of 4,000 jobs.

The Delaware State Chamber of Commerce was the first business organization to oppose the bill. The DSCC Public Policy & Government Relations Director Tyler Micik testified that while health care is a top concern among its members, but it was a complex issue that many of its members may not be well-versed in.

“From the perspective of payers, the entirety of this is complicated and includes federal and state programs they have limited knowledge of. Small manufacturers, accounting firms, building contractors or retailers, healthcare is just not what they know or do. This is a benefit they provide their workforce but is not something they’re experts on. There are many pieces to this complicated puzzle,” Micik said.

ChristianaCare said in an all staff email that if HB 350 passes, it could see a $180 million reduction in funding as soon as 2025. Beebe Healthcare told the Delaware Business Times that Beebe would see $60 million cut over the course of two years. 

The Delaware Business Roundtable independently voiced its opposition to HB 350 at the end of April in a separate letter, citing concerns that it will drive away innovators in the health care space.

“As a group of business leaders, we are well aware of the impact of high health care costs, but the policy behind [this bill] is not the solution. Rather, it has the potential to stifle innovation and growth,” Delaware Business Roundtable Executive Director Bob Perkins and Chair Brian DiSabatino said in a prepared statement.

“Delaware’s hospitals are some of our largest employers, providing world-class health care that Delawareans demand. As employers who are regularly engaged in the procurement of health care for employees, we would welcome a conversation with the state about what could lower costs without the risk to Delaware’s hospitals, medical community or business-friendly reputation,” the statement continues.

For weeks, the Delaware Healthcare Association, ChristianaCare, Beebe Healthcare, and Bayhealth have been heavily lobbying against the bill. Several advertisements have appeared on social media, urging people to call legislators and tell them to vote no on HB 350.

Medical professionals who work at ChristianaCare and Beebe have authored many opinion pieces about how HB 350 could potentially restrict health care access for Black and Hispanic community members and other underserved populations. 

Meanwhile, Bayhealth has recorded a “Scrub In” podcast episode about HB 350 and several other hospitals have created websites specifically targeted against the bill. An advertising campaign against the bill has also been launched with regional ads appearing as commercials in streaming services as well as on social media.

Late last week, Senate Republicans issued a statement in opposition to the bill, noting that it was rare when the government directly injected itself into private industry and “improved the conditions it wished to correct.”

The Delaware Business Roundtable also warned that if HB 350 passes, it would demonstrate to companies and innovators that “the Delaware General Assembly is no longer sensitive” to their needs.

“Rather, the Delaware legislature wants to review budgets and business decisions by a class of private businesses, because it believes it knows their business better,” the roundtable statement said. “Enactment of [this bill] would set a precedent that Delaware cannot afford if it wishes to continue to attract jobs, talent and investment to our state.”

Editor’s note: a previous version of this article incorrectly stated that Nemours would be exempt from HB 350. It will be exempt from the price cap portion of the bill. We regret the error.

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