Soaring healthcare costs are holding Delaware back (DE Finance Secretary Rick Geisenberger)
State healthcare outlays (primarily for Medicaid and state employee benefits) will grow over twice as fast as DE revenue over the next two years and also considerably faster than overall outlays (which are to be limited to 3.5% per year growth). Taxpayers will be on the hook for more than $1.3B in 2019 (FY or CY) alone or over 30% of the total state budget. Healthcare outlays are also straining the budgets of DE families & businesses, thereby limiting household spending & the ability of “companies to invest and create jobs.”
Only Alaska and Massachusetts spend more per capita on healthcare than DE (we’re 27% above the national average), yet DE ranks 30th in overall health[care] quality. So we’re not getting our money’s worth.
Delaware incomes have increased 25% since 2010, but worker’s contributions for healthcare are up by 40%.
OK, there are many jobs in the healthcare sector, but the fact remains that healthcare costs are growing faster than the economy. So in 2017, House Joint Resolution 7 authorized the DE Health and Social Services Department (DHSS) “to establish a benchmark with a growth rate for healthcare vs. growth in our overall economy” and “identify metrics to measure and track spending and quality across our healthcare system.”
Governor Carney then established a Healthcare Delivery and Cost Advisory Group “to assist in this process and provide feedback to DHSS Secretary Kara Odom Walker.” There has been “a great deal of energy and enthusiasm” about this undertaking, but “some providers of healthcare services are [understandably] concerned that, in the future, a benchmark might be used to set price controls or create spending caps on private healthcare spending.”
“This is not at all the purpose of the benchmark.” The goal is simply “to provide additional price transparency and attention to” healthcare costs and quality across the state. After all, “Delaware families and businesses deserve to know how much they are paying for [healthcare services] and what they’re getting for their money.”
With better information available, all concerned will be able to make better decisions. And “we can use this information to work collaboratively to address unwarranted variations in costs and quality.” As Governor Carney has said, “lowering healthcare costs while improving quality is the most important things we can do for the future health of our economy, our citizens and our finances.”
In other words, the concerns about de facto price controls are valid, but the state administration doesn’t want to admit it.