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Delaware Senate Democrats

Legislation to Stabilize Primary Care, Reduce Healthcare Costs and Improve Outcomes Released From Committee

April 28, 2021

DOVER – Legislation designed to curtail the rising healthcare costs for most Delawareans and refocus the First State’s healthcare system on preventative primary care and beneficial outcomes was released by the Senate Executive Committee on Wednesday.

According to the 2020 Delaware Health Care Affordability Standards Report, the average cost of care for Delaware residents with commercial health insurance grew to more than $7,000 in 2019 – an increase of 6.4% over the previous year and more twice the rate of growth as per capita income in the state. The average premium for health insurance coverage on the individual market reached nearly $8,600 in 2019 or 16% of the per capita income in Delaware.

Delaware premiums are now the fourth highest in the nation for the fully insured small group market and fifth highest for the individual market.

Meanwhile, Delaware’s adult obesity rates, opioid-related overdose deaths and the rate of emergency room visits have only worsened, while two of the state’s three counties continue to qualify as primary-care shortage areas – a trend likely to continue with 60% of primary-care physicians in the state nearing or currently over retirement age.

“Delawareans are spending more on health care every year and getting diminishing results in return – the hallmark of a broken system. Coupled with the worsening shortages of primary care providers, Delaware’s current system delivers for too few Delawareans at too high a cost for all. We simply must insist on a new approach; the system will not heal itself,” said Senate Majority Leader Bryan Townsend, D-Newark/Bear, the prime sponsor of Senate Bill 120, along with Rep. David Bentz. D-Christiana.

“This legislation will begin the process of reshaping our healthcare system so that it is instead focused on keeping our neighbors out of the hospital, extending their lives and improving the quality of their health,” he said. “There is no better way to accomplish those goals than by ensuring providers are paid to keep people well via primary care. The time has come for the elected leaders of this state to require a focus on positive results for the people of Delaware.”

SB 120 would implement a series of reforms designed to improve the metrics used to reimburse providers, place hard caps on total cost increases of certain inpatient and outpatient medical services, bolster investments in expanding the availability of primary care services, and provide the Department of Insurance more tools to address ballooning costs.

The legislation would direct the Delaware Health Care Commission and the Primary Care Reform Collaborative to promote value-based care delivery, a form of reimbursement that ties payments more proactively for care delivery to the quality of care provided and rewards providers for efficiency and effectiveness.

SB 120 also would set annual caps to limit how much the cost of medical services supplied by hospitals, dentists, home health care providers, and others could increase in a given year. Those caps would be tied directly to the annually adjusted Consumer Price Index developed by the U.S. Bureau of Labor Statistics.

The bill would require insurance companies to gradually increase the volume of total medical care costs spent on primary care in each of the next four years until at least 11.5% of their annual investment is directed toward providers and services on the front lines of our state’s healthcare system.

SB 120 also would direct the Delaware Department of Insurance’s Office of Value-Based Health Care Delivery to set a baseline for payment innovations used by insurance companies, including models that incentivize high-quality and cost-efficient care.

“The primary care industry in Delaware is facing substantial challenges. Physicians are retiring or leaving the state, creating a shortage that means poor access to care for residents. Factor in the low reimbursement levels and we have an unsustainable system,” said Rep. Bentz, the lead House sponsor of SB 120. “We need to tackle this crisis head-on immediately. Primary care is critical to improving health outcomes and reducing costs long term. Increasing the guaranteed investment in primary care will pay dividends for the primary care industry and the residents it serves.”

“Having adequate access to a robust and comprehensive network of primary care providers has been demonstrated in other states and countries to improve health outcomes and decrease overall health care costs,” said Dr. Nancy Fan, Chair of the Delaware Health Care Commission. “Senate Bill 120 adopts the recommendations of the 2020 report of the Office of Value-Based Health Care Delivery, which provides a path to increase funding to primary care providers to maintain their practices and be compensated for comprehensive quality care, and to address other drivers of health care costs in Delaware and slow the growth of our total cost of health care.”