Gov. John Carney on Thursday signed House Joint Resolution 7 granting authority to the Department of Health and Social Services (DHSS) to establish a health care spending benchmark for Delaware with a growth rate linked to the overall economy of the state.
The signing ceremony comes less than three months after a federal analysis found Delaware had the third-highest per capita level of health spending of all the states.
The resolution was sponsored by House Majority Leader Valerie Longhurst and Democratic leadership, and supported by both parties, authorizes DHSS Secretary Dr. Kara Odom Walker to establish the benchmark as a way to evaluate the total cost of care of health care in the state.
The benchmark aims to move the sate to a more outcome-driven system and away from a system that pays for care based solely on the number of room days, visits, procedures and tests.
Delaware’s per capita health care costs rank behind only Alaska and Massachusetts, according to spending data released in June by the Centers for Medicare and Medicaid Services (CMS).
The CMS analysis of all insurance payers – Medicare, Medicaid and private – found that per capita spending in Delaware for 2014 was $10,254, compared to the U.S. average of $8,045. Without changes, the analysis estimates that Delaware’s total health care spending will more than double from $9.5 billion in 2014 to $21.5 billion in 2025.
“Health care, both access to quality care and rising costs, is a priority and concern that affects all Delawareans,” said Lt. Governor Bethany Hall-Long. “With over 80 percent of the health care costs going to 20 percent of the population, we must invest more in outreach and prevention to make quality health care more affordable for everyone. It especially places an unfair burden on our senior population. As a nurse, I believe this benchmark is a crucial first step and I applaud the legislators, stakeholders, and Walker for working to provide affordable quality health care for all Delawareans.”
“Health care costs account for a significant chunk of Delaware’s total budget – about $1 billion – and they continue to rise. It’s time to analyze those costs and find substantial ways to improve the overall health of Delawareans without such a burdensome price tag,” said House Majority Leader Valerie Longhurst, prime sponsor of House Joint Resolution 7. “It’s my hope that this resolution will help bring a variety of health care stakeholders and perspectives together to create a benchmark that will improve the quality of health services in our state at a lower cost. We have the chance to change the trajectory of health care in Delaware, and support our residents in becoming healthier and more successful throughout their lives.”
“Now is the time for Delaware to embrace the concept of a benchmark for health care spending that will ultimately drive our efforts toward value-based care and better outcomes for our citizens and away from volume of care and high utilization,” DHSS Secretary Walker said.
Of the $10,254 per capita figure in Delaware, the federal analysis found this breakdown of spending:
- $4,078 for hospital care;
- $2,259 for physician and clinical services;
- $1,525 for drugs and other medical nondurables;
- $1,438 for nursing home, home health and other personal care;
- $757 for dental and other professional services;
- $197 for medical durables.
In all six categories, spending in Delaware was higher than the national average, ranging from a high of 37 percent higher for drugs and other medical nondurables to a low of 18 percent higher for nursing home, home health and other personal care.
The state’s high health care costs have long been an area of concern. Over the years, blame has been placed on everything from the unhealthy lifestyles, an explosion in the use of diagnostic equipment, high rates of chronic diseases, and health care systems with dominant market shares that limit competition.
Also, state government has become a dominant employer, with legislators unwilling to take aggressive measures to control costs affecting a powerful constituency.
Still, the state is now running large structural deficits, making efforts to deal with health care costs are a higher priority.