Current healthcare costs unsustainable

Healthcare in Delaware is expensive; there’s no getting around it. In a 2024 study, Delaware ranked fourth nationally for healthcare costs. Delawareans spent an average of $12,294 per year on healthcare. That represents a staggering 29.1% of the median income in our state. These costs are unsustainable for working families in Delaware.

Over the years, we have worked with Gov. John Carney and the hospital systems to find a solution to this problem. In 2018, we established a healthcare spending benchmark, a set of targets for hospitals to regulate their own healthcare spending in Delaware. The targets were set to match GDP growth in the state, around 3-3.8%. The healthcare industry broke far past these goals in every year since except for 2020. In some years, healthcare spending grew as much as 11.2%.

We hoped by setting these goals, the major providers in our healthcare industry would come to the table and work with us to decrease cost growth. I am sorry to report that we were wrong.

During this time, hospital costs soared to 42% of all healthcare costs in Delaware. Inpatient and outpatient costs at Delaware hospitals totaled $3.5 billion in 2021. Delaware hospitals profit $2,006 per patient, a full 40.5% higher than the national average of $1,331. When I saw all these statistics, I knew we had to do something.

HB 350 would create the Diamond State Hospital Cost Review Board. This board will bring transparency to our hospitals and allow the public to see where their billions of dollars are being spent. Delawareans have the right to know that their money is going toward improving healthcare outcomes and not to executives, lawyers and accountants that have nothing to do with care delivery.

Legislation of this level of importance always leads to a high level of misinformation, and this has been the case for HB 350. Hospitals have stated that this will cause them to close programs, cut jobs or even close hospitals all together. These arguments are simply not true.

In other states that have implemented similar legislation, no hospitals have been forced to close, and they spend a greater portion of their budgets on direct-care staffing than in Delaware.

The president of the Delaware Healthcare Association said himself on the House floor last week that hospitals have not been discussing cutting jobs because of this bill.

These false claims are coming from a desire to stop the transparency that the legislation and review board will bring to hospital pricing. They are coming from a fear of overdue accountability for the hospital industry’s role in rising healthcare costs.

We have seen over the last few years that hospitals in Delaware have enough resources to invest and open hospitals in other states across the nation. We have seen they have enough resources to pay dozens of executives over a million dollars per year. And we have seen that they are comfortable charging Delaware patients 40% more than the national average.

I believe the hospitals that we support, that our families work at, and that are an integral part of our community should invest here in Delaware. That they should invest in doctors, nurses and medical equipment. And most of all that they should invest in the health of our communities, our people and our state.

That’s what HB 350 is about. We’re not looking to punish hospitals with this legislation. The goal is instead to make hospital operations sustainable for Delawareans, the state and those businesses that provide health insurance to employees.

Current healthcare costs are unsustainable, and it’s time for a real solution.