State officials push plans to reduce health care costs

DOVER — The budget-writing Joint Finance Committee began digging into the Department of Health and Social Services’ proposed budget Tuesday, the first of three days dedicated to the agency. One of the most expansive state entities, DHSS has almost $1.2 billion allocated to it in the current fiscal year — about 28 percent of the state’s $4.27 billion general operating budget.

The spending plan recommended by Gov. John Carney for the fiscal year starting July 1 earmarks about $42 million more for DHSS, $15 million of which comes from Medicaid growth. While Medicaid costs have skyrocketed in recent years — the Division of Medicaid and Medical Assistance’s allocation has grown from $673 million five years ago to $769 million this year — a recent rate increase by the federal government means Washington will absorb some of the costs for the upcoming fiscal year.

Lawmakers on the committee spent part of their time with health officials discussing the state’s high spending on health care, with DHSS Secretary Kara Odom Walker saying Delaware does not receive adequate results for the money it invests in health care. The state both pays more than it should and has a less healthy population compared to the nation at large, she said.

As of 2014, Delaware was third in per capita health care spending, at just over $10,000, 27 percent higher than the national average. However, the state was ranked 31st in overall health last year, per DHSS.

From fiscal year 2013 to 2017, the state’s health care expenses rose $202 million, or 22 percent. That trend could continue barring changes: Counting federal and private dollars as well as state spending, Delaware’s health care costs are projected to more than double from $10.2 billion in 2015 to $21.5 billion in 2025.

Such growth, officials have emphasized, is unsustainable.

Former Gov. Jack Markell attempted to tackle the issue in his last years in office, and Gov. Carney has continued that effort, with a subcommittee of the Delaware Economic and Financial Advisory Council setting a goal of limiting health care cost growth to 3.8 percent this year. Also referred to as a benchmark, that target shrinks in the coming years.

Decision-makers hope they can bend the cost curve, to borrow a phrase, thus avoiding a ballooning budget that necessitates service cuts or tax hikes.

Key to that plan is getting Delawareans to live healthier lifestyles and incentivizing state employees to seek cheaper but still effective care, officials said. Those special areas of emphasis to improve the health of Delaware’s population include reducing obesity, tobacco use and emergency room visits.

“We have yet to see what happens, but it is important to see what state employees are willing to do, whether they’re willing to travel, how much inconvenience they’re willing to take for themselves and their families for lower costs,” Dr. Walker told JFC.

Last week, the State Employee Benefits Committee voted to increase copays for certain services under some plans. Medical imaging services like MRIs and X-rays now cost more at facilities based in hospitals, while outpatient laboratory work at non-preferred labs and emergency room visits will force state employees to pay more out of pocket.

As a trade-off, however, copays for urgent care centers and preferred outpatient labs remain low or, in the case of freestanding imaging facilities, nonexistent. Telemedicine copays were also eliminated by the SEBC.

Premium increases may be forthcoming in the next few months.

Also touched on Tuesday were vaping and gun violence. While cigarette use has declined (14 percent of adults in the United States smoked in 2017 compared to almost 21 percent 12 years earlier), health officials and experts worry electronic cigarette use has become the new fad among teenagers and young adults.

Though vaping may be less harmful than smoking, it can still be hazardous to one’s health, Dr. Walker said. Several lawmakers concurred, with Sen. Trey Paradee, D-Dover, remarking that vaping is “introducing a whole new generation to nicotine addiction.”

Meanwhile, Sen. Dave Lawson, R-Marydel, questioned Dr. Walker about her declaration DHSS is working to combat gun violence in the state.

Dr. Walker said the agency seeks to teach children and teenagers they should not view firearms as a way to solve problems. That effort is especially focused on Wilmington, where gang-motivated shootings are common even among youths.

But Sen. Lawson said officials are looking at the wrong issues, demonizing guns rather than recognizing violence is not limited to shootings.

“When you’re targeting the politically correct gun violence, I take exception,” he said.

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