Hospitals, health secretary at odds over cost-cutting (Meredith Newman)

Previous coverage of an DHSS healthcare benchmarking initiative suggested that benchmarking wasn’t likely to produce the envisioned savings. Get serious on healthcare costs, Kara Odom Walker, 2/11/18. [W]here is the evidence that a top-down healthcare system will work unless there is de facto rationing to achieve cost reduction goals? A subsequent column by the president of the Delaware Healthcare Association (DHCA) seemed in synch with our view. We're working to control healthcare costs, Wayne Smith, 2/18/18. Reading between the lines, Smith isn't sold on the transformative powers of healthcare benchmarking (the state government's much-publicized label for its efforts to slow the growth of healthcare costs for Delawareans).

The current story concerns a recent letter from Wayne Smith to Governor John Carney, endorsed by leaders of “every hospital in Delaware,” which explicitly challenges the benchmarking proposal. According to Mr. Smith, the DHCA “will not support the benchmark without a fundamental reset of this process, including consideration of what other options exist for addressing rising healthcare costs in Delaware.” The letter goes on to characterize the proposal as “a price control regime” and say it would compel hospitals to curtail “certain services.” Speaking for the governor, ex-News Journal reporter Jonathan Starkey expresses the governor’s disagreement with the letter – apparently because Delawareans believe they are overpaying for healthcare. And Karen Odom Walker is quoted that the proposal isn’t a top-down control, it simply would give the public “greater information about what we are spending on healthcare” and “greater insight about what’s going on in all areas of healthcare spending.”

In future discussions, suggests the DHCA, DHSS should focus on the cost (currently about $1.6 billion per year) of state outlays (state employee healthcare benefits, Medicaid, etc.) rather than total healthcare costs. Ms. Walker disagrees, observing that “if we do nothing to change this healthcare spending rate we will be in a crisis situation,” and it will become impossible to “problem solve collaboratively.”

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