Business, Nonprofit Leaders Warn Hospital Board Is Bad Idea

The bill that would establish a board to review and control state hospital budgets is up for a Senate hearing today at 4 p.m.

Business and nonprofit leaders have joined hospital and health groups in an effort to stop the state from creating a board that would control hospital budgets, but it might be too little too late.

The issue will come up again today at 4 p.m. in the Senate Executive Committee, which has a hearing House Bill 350.

It’s the last stop before the bill heads to the Senate floor, where it is all but guaranteed to pass because of the Democratic supermajority.

That supermajority means the Senate has enough Democrats that they can pass anything without needing a vote from a Republican.

One one side of the fight is Speaker of the House Valerie Longhurst, D-Bear, Gov. John Carney’s office and the Delaware Department of Health and Social Services, who believe the board is needed to control the state’s soaring healthcare costs.

They point to healthcare costs taking up one-third of the state’s $6 billion budget, and the recent news that employee health premiums will rise 27% next year.

Hospital allies

On the other side are hospital, business and nonprofit leaders as well as Republicans who are horrified that Democrats want to take the financial reins of private businesses, superseding local control.

As hospitals have tried to rally opposition in the last week, their employees and business leaders such as the Delaware Business Roundtable and chambers of commerce have joined the cause, with letters, videos and social media posts.

In a letter to legislators, the Roundtable said, “Enacting a bill with that oversight has the potential to irrevocably tarnish Delaware’s reputation among the national and international business community as a place where businesses are welcome and where innovation thrives.”

It also said that the business leaders were well aware of the impact of high healthcare costs, but said HB 350 is not the solution.

“Rather it has the potential to stifle innovation and growth in the health care space in Delaware,” the letter said.

The move implies the state knows how to run a business better than the business does, the letter said.

“It is unlikely that any CEO, board of directors or shareholder would want to move to (or maybe even remain in) a state where that is a possibility,” the letter said.

The Delaware Healthcare Association, a trade association of hospitals and other health providers, sent out a statement from healthcare, nonprofit and business leaders warning that HB 350 is dangerous in its current form.

“This bill will have disastrous ramifications on not just the hospital systems but on the business and nonprofit communities,” it said. “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. “

House Bill 35o, now known as HS 2 for HB 350 w/ HA 1, will require six statewide hospital systems to submit their budgets in 2025 to the Diamond State Hospital Review Board for review.

But in 2026, that board will be able to require hospitals to submit a performance improvement plan before its budget is approved.

Longhurst argues that hospital costs make up 42% of state health costs, well above that of other states. Hospitals say that the state cannot pinpoint one contributor without also including other groups such as insurance and pharmaceutical companies, because all the financial impacts are intermingled.

In a fierce House filibuster two weeks ago, Republicans argued that Longhurst had not sent the bill to the House Health Committee and instead sent it to the House Administration Committee. The same will happen in the Senate, with the bill sent to its Executive Committee and not its health committee.

House Dems essentially silenced Republicans to push Longhurst’s bill through.

Listen to the Senate Executive Committee meeting here.