These laws are hurting Delaware health care
The COVID-19 pandemic has shone a light on many issues in the state, from government transparency to education, but perhaps the biggest focus: health care.
Our Governor, along with many others, said that the mandatory shut downs one year ago were to prevent our hospitals from going over capacity. But was the problem COVID cases or our lack of hospitals in the state?
Delaware has certificate-of-need (CON) laws in the form of the Delaware Health Resource Board. These laws require that health care providers show a need in the community for new devices, certain technologies, or expand or establish a practice. However, research finds that CON laws are associated with higher health care spending per capita and higher physician spending per capita. In Delaware, CON laws create a barrier to entry into the market, inhibit expansion, and fail to provide adequate health care services in some areas.
Delaware has seen the consequences of CON laws in health care. The First State has the highest average monthly insurance premium and one of the lowest percentages of medical residents retained.
Additionally, Delaware spends more per-capita on healthcare than every nearby state excluding New York, and ranks 7th overall for state health spending. For health care spending for patients over 65, Delaware ranks 5th highest, 6th highest for state government spending.
This isn’t the only negative impact these laws have had on our state. The presence of a CON program tends to be associated with fewer rural hospitals. Last year, we saw a battle in Sussex County regarding an expansion of services, since currently only three hospitals service 1,196 square miles of the rural county. The request to expand was denied by the HRB.
Why does Delaware still allow a virtual monopoly in health care that drives up everyone medical bills?
Proponents of CON laws argue that they help to reduce health care costs and increase access to care. Contrary to typical supply and demand, they also argue that a shorter supply of health care services in the market results in a reduction of average prices.
A report by the Mercatus Center at George Mason University estimates that by removing CON laws, Delaware could see a $270 saving on total health care per capita and $99 savings in physician spending per capita. The same study estimated increased access to services with a 42% increase in total hospitals and 17% increase in the number of ambulatory surgical centers.
If this outdated Board had been sunset by the Joint Legislative Oversight and Sunset Committee last year, our COVID story may have been different.
Residents of the First State deserve to have better access to care with lower costs. Delaware has had harmful CON laws on the books since 1978. Forty-one years later, it’s time to reevaluate, and make decisions that serve the health and well-being of every Delawarean.