Would a Vermont-inspired hospital cost review committee work in Delaware?

DOVER — Lawmakers are trying to curb rising health care costs and increase fiscal transparency with the proposed Diamond State Hospital Cost Review Committee.

This would give the state control over annual hospital budgets.
Democratic leaders and state health stakeholders have noted that Delaware’s model draws inspiration from similar policies in Massachusetts and Vermont, particularly the latter’s Green Mountain Care Board.

But opponents like the Delaware Healthcare Association, which represents the state’s five nonprofit hospitals, and Republicans in the General Assembly have pushed back on those states’ efforts, noting that many hospitals in Massachusetts and Vermont operate at a deficit or risk closing.

House Speaker Valerie Longhurst, D-Bear, who is leading Substitute 2 of House Bill 350, refuted those claims throughout the legislation’s review, noting that Vermont ranks fifth in the nation for the overall performance of the health system while touting the lower percentage of residents who choose not to seek health care due to cost.

“Vermont has been able to reduce health care costs without compromising quality or access through a model very similar to the board we are proposing,” said Rep. Longhurst.

Composition of the table

Structurally, the Diamond State Hospital Cost Review Committee would consist of eight members; the president of the Delaware Healthcare Association as a non-voting participant and seven members appointed by the governor with knowledge of health care policy, business, finance or accounting.

Appointed members must be confirmed by the Senate and will elect a president who will receive a salary of $40,000 per year. The other appointed members will receive a salary of $35,000 for their work.

Factoring in salaries, additional staff and ongoing contract support, the Diamond State Cost Review Board will cost the state nearly $1 million annually over the next three years. If the legislation becomes law, the council will begin its review process in 2026.

How it works

The review process will depend on the state’s spending growth benchmark, which has fluctuated between 3 and 4 percent since its inception in 2018. If hospital growth continually exceeds the threshold, the board can submit hospitals to a performance improvement plan to develop solution strategies. .

If a hospital with a performance improvement plan continues to fail to meet the benchmark, the board could require the entity to submit its proposed budget to an approval process.

“It is the hospitals that then develop their improvement plans in collaboration with the board of directors. But the same type of collaboration can happen,” said Senate Majority Leader Bryan Townsend, D-Newark, who is leading the bill in his chamber.

“It’s not just a simple strict liability like, ‘You’re over this threshold, we’re going to fine you.’ The heart of it all should be the collaborative approach, whether it is an improvement plan that can bear fruit or whether it is the mechanism.

Opposition

While Democratic leaders pledged to pass the bill because of its ability to address rising health care costs and fluctuating outcomes, hospital stakeholders remained opposed to the initiative, saying partly because of his “political control”.

Hospital executives testified against the bill Tuesday during its consideration by the Senate Executive Committee, including Bayhealth President and CEO Terry Murphy, who told the Daily State News that the crux of the problem lies with the good governance.

He referenced the makeup of Vermont’s board, which is made up of two lawyers, two representatives from academia and a doctor, and said Delaware’s body would likely be similar.

“Our 17-member Bayhealth Board of Directors includes one nurse and six doctors,” Murphy said. “They know best, they are closest to the patient, they are closest to our community and know what our health systems need in terms of quality, cost and service – and where we are going with our plans,” Mr. Murphy said. .

The health official added that leaders are willing to work with lawmakers on a compromise to be transparent with hospital budgets, but remain concerned about having to define an approval process for their spending growth.

Republican lawmakers also pushed back against House Bill 350, citing the strain it would put on hospitals, the performance of similar structures in Vermont and Massachusetts, and the hypocrisy of the state exceeding its own hospital growth goals. spending in recent years.
Vermont Viewpoint

During the bill’s hearing before the Senate Executive Committee, Minority Whip Brian Pettyjohn, R-Georgetown, called the former president and CEO of the University of Vermont Health Network , John Brumsted, to speak about his experience with the state’s Green Mountain Care Board.

The board was initially intended to help make a single-payer system work in the state, but that plan became too expensive, he said.

Since then, he said the board has focused solely on health care costs, as opposed to other factors like access and quality, while essentially acting as an independent board, which which led hospitals to operate in deficit.

“If there is no margin at the hospital, there is no reinvestment of capital. So there hasn’t really been an investment in facilities, programs, rejuvenation or certainly innovation over the last few years,” Brumsted said. “All of this has created an environment in which there is a lack of trust between the provider community and regulators, which is unique to Vermont.”

When asked how hospital stakeholders and the state could address this complex problem in the First State, Brumsted emphasized collaboration, which could help the state prevent problems from arising in Vermont.

“It needs to be a collaborative environment that brings all stakeholders together and a collaborative approach to value-based care that essentially budgets for populations. It’s a proven approach. Do it with everyone in the room and without pejorative mechanisms to artificially restrain the true costs of health care,” he said.

Throughout the legislative journey in the General Assembly, Rep. Longhurst and Sen. Townsend have referenced their frustrations with how negotiations have gone, although they remain committed to working with hospital leaders to “ensure that more of the profits generated from providing health care to Delawareans are spent on keeping Delawareans healthy.”

Despite differing views on the bill, House Bill 350 remains in the Senate, where it awaits a vote. The companion bill to the measure, House Bill 395, which was introduced Wednesday, was released by the House Administration Committee and also awaits a floor vote.