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Delaware hospital oversight bill draws criticism

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(The Center Square) — Delaware lawmakers are moving ahead with a plan that will give the state more regulatory authority over nonprofit hospitals, but the move faces pushback from hospital groups and other critics who say the plan smacks of government overreach.

The compromise proposal, hammered out in negotiations, would create a seven-member Diamond State Hospital Cost Review Board responsible for reviewing hospital budgets and related financial information annually to gauge their fiscal health. The board would require hospitals to stay under spending benchmarks, which would require them to meet financial obligations.

“The revised House Bill 350 will help lower the growth of health care costs in our state, while making sure we’re protecting health care quality,” Gov. John Carney said in a statement. “I look forward to signing it into law.”

Lawmakers made last-minute changes to the bill that gave hospitals more flexibility to meet health care spending benchmarks and removed the yet-to-be-created oversight board’s ability to seize hospital assets, among other amendments.

The changes were enough to sway the Delaware Hospital Association, which opposed a previous bill version. The group, which represents hospitals, informed legislative leaders late last week that they are dropping their opposition to the measure based on last-minute amendments to the bill.

In a letter to lawmakers, DHA president and CEO Brian Frazee said the amendments will “reduce the immediate harm to our state’s hospitals and healthcare system,” and the group will “no longer actively oppose the bill.”

But Frazee said the DHA is still “deeply concerned” about other provisions in the legislation, including “creating a politically-appointed oversight board with the potential to modify and approve hospital budgets.”

“The members of DHA reserve rights to remedy this legislation if passed,” he wrote. “We will continue our work to ensure Delaware hospitals can meet their obligation and commitment to provide access to high- quality care to our patients and the communities we serve.”

“This legislation is not about punishing hospitals, but rather ensuring our constituents are able to access quality and affordable health care and to put a system into place to slow down the skyrocketing costs that we have experienced in Delaware,” House Speaker Valerie Longhurst, D-Bear, said in remarks.

Republicans opposed the push to exert more oversight of the state’s nonprofit hospitals, blasting the legislation as government overreach that would impact hospital finances and their ability to provide patient care.

State Rep. Danny Short, R-Seaford, an outspoken critic of the measure, welcomed the concessions in the latest bill version but said he will likely still oppose it.

“Even in its less objectionable form, I still find the legislation a troubling overreach of governmental authority,” he said. “The supposition of the bill’s sponsors is that the hospitals are making unreasonable profits and are a major reason for healthcare cost hikes. Collectively, our state’s nonprofit hospitals actually lost money last year.”

He said one of the biggest factors in Delaware’s rising health care expenses “has been its inability to prudently manage its cost structure for medical services and prescription drugs.”

“Before establishing a new bureaucracy to further expand its authority into the private sector, the state should first competently manage its own healthcare plans and address its failure to rein in state spending growth,” Short said.

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