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Committee recommends weakening Health Resources Board

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After a heated debate on the future of Delaware’s top health care regulator, lawmakers on Tuesday voted 9-1 to recommend transforming the Health Resources Board (HRB) into an advisory board.

The Joint Legislative Oversight & Sunset Committees decision could mark a major overhaul for the HRB, which was formed decades ago to control health care costs by regulating major equipment purchases and the number of beds in hospitals and nursing homes. The recommendation would need to be approved by the Delaware General Assembly as it is

Reducing the HRB’s role to an advisory capacity could solve problems such as board members’ conflicts of interest and lack of independent data, according to legislative analysts who recommended the change. They said it could also streamline the decision-making process, with a state-appointed director who would make the final decisions.


“The idea is that people have an agency at the top to make the final decision with the inputs of an advisory board,” legislative analyst Amanda McAtee said during Tuesday’s meeting. “It makes it a more transparent public process for the public … (The HRB) is also helping to facilitate the public meetings, but the agency that is over top of the board would be sitting in on all those meetings, so they would work together.”

Delaware is one of 11 states with decision-making boards like the HRB that review major health care projects.

A Sunset Committee report last month showed that the 15-member board struggled with attendance, which slows down the application process – and potentially health care expansion throughout the state. The HRB process can take an average of 117 days, due in part to member absences or to avoid conflict of interest.

The report also recommended hiring at least one state employee to conduct independent research on applications, instead of relying solely on applicant data, as well as raising the expenditure cap to trigger a review. Currently, Delaware requires the HRB to review all health care projects costing $5.8 million or more, making it among the lowest in the Mid-Atlantic region.

While Sunset Committee members agreed that the HRB needed major structural changes, they came to a standstill last month on what those changes should entail, with some members in favor of modifying the board while others sought to disband the HRB entirely.

“Last time I was in favor of terminating the board. I think we really need to completely overhaul this board,” Sen. Brian Pettyjohn (R-Georgetown) said during Tuesday’s meeting. “But to move the ball forward, to move this discussion forward and to implement and recommend some of these recommendations to the General Assembly for the full body to adopt, I will be supporting option one (to continue the HRB).”

Proponents of keeping boards like the HRB say they provide greater transparency by reviewing quality, charity care standards and whether proposed projects will serve the community or drive up health care costs. They help ensure that health care services are distributed to rural areas and other communities that may have difficulty accessing those facilities.

Completely dissolving the HRB could mean a lack of checks and balances in Delaware’s health care marketplace.

“We really lose any sort of oversight or ability to have transparency around the decisions,” Delaware Health Secretary Molly Magarik said during the meeting. “We just end up with a much more haphazard process where people can put freestanding emergency departments wherever they want.”

But critics argue that they limit competition and are not necessary for regulating the marketplace.

“You can’t just put up hospitals wherever you want. That is not true,” Rep. Jeff Spiegelman (R-Clayton) said during the meeting. “There are still checks, and those checks are through local zoning and board decisions and things like that.”

Spiegelman was the sole legislator who voted against continuing the HRB on Tuesday, giving the Sunset Committee enough votes to release it from review.

Members unanimously adopted further recommendations, including the HRB’s shift to advisory capacity, developing statutory revisions to the HRB, and requiring the HRB to conduct or contract a statewide health care facility utilization study every five years that will be made available to the public.

The first progress report on those recommendations is due in September.


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