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Hospital Intrusion is not a lifesaving infusion of capital for Delawareans

By: Ruth Briggs King, Board Member, A Better Delaware

For years I was the only member of the Delaware General Assembly with any medical education or experience. I brought my insight and ideas to improve the quality of care, access to care, and avoid unnecessary interference that is costly or unnecessary.

As a result of my experience, I am very concerned about S1(Substitute 1) for HB 350, now pending in the General Assembly. This misguided legislation purports to create control over the State’s health care costs. What it clearly demonstrates is that some State law makers have misdiagnosed the problems with existing health care costs in Delaware. They are proposing to try to control the finances of a complex entity and private, non-profit community hospital which, by any other unqualified individual, would be considered malpractice. This bill will create a chilling effect on quality and patient centered care in our State. I call on our legislators to consider the ramifications of HB 350 and to vote “No” on this bill.

First and most importantly, the legislation has misplaced the blame for increasing health care costs on the hospitals. This effort is clearly simply a look at the bottom line and not intended to address many other significant issues in the delivery of health care in Delaware.

A candid look at past performance demonstrates that the State cannot appropriately manage the health care services it currently seeks to deliver, and therefore should not, in any way, intrude into our private health care system. There has been much media coverage and internal discussion about the problems and woes in the State run hospitals, such as the home for the chronically il, the veteran’s home and the correctional facilities health care. Despite years of poor performance, the State has not fixed their own health care delivery problems.

Hospitals do not operate in a vacuum or an isolated environment. They are not immune to the impact of escalating energy costs; wage increase demands and government regulation imposed by multiple State and Federal agencies. Additionally, our hospitals provide emergency care at no cost to those who are uninsured. And we, the people who are served by these hospitals, expect the best care, the latest technology, and the best outcomes. This all comes at a cost.

The legislators are blind to the impact the very legislation they pass has on the cost of healthcare and, therefore, the hospital community. Delaware’s expanded Medicaid eligibility provisions have forced Delaware taxpayers to pay $20-30 million more each year for the last 4-5 years. At the same time, the Medicaid reimbursement to the hospitals, as well as long term care facilities, has not accelerated to cover the costs. For example, a small community hospital in Sussex County loses money on each Medicaid newborn delivery. And they lack the volume of deliveries to make it “balance” the cost. Should they stop delivering babies? No, in fact, the hospital voted to continue the service at significant loss. Will the State cover the “loss” on those services? No. The State expects the hospitals to do more with less and then is critical of their budgets.

Let us be specific. Hospitals have to plan for increased demand. They hold aside reserves in anticipation of future construction and equipment needs. Would the proposed legislation affect these, and other, capital budgets or simply operational budgets? And what happens when real-time operational decisions have to be made? How could this arrangement “manage” a 20-car pileup on I95, or, worse, a pandemic, such as COVID?

Our current hospital boards are, generally, well governed and represent the community in which they are located. The remedy for increasing healthcare costs is less government intrusion and for lawmakers to understand how their decisions impact the cost of care and services. Healthcare and hospitals are not in a cloistered environment that protects them from escalating costs.

Hospital boards face complex decisions and need skill and expertise to make the sophisticated analysis to develop a strategic plan to serve the community. They anticipate population growth and need. Our Sussex County community hospitals recently established residency programs to address the lack of supply and high demand for primary care physicians. Furthermore, it is the hospitals that have sought and funded consulting firms to discuss the need for a medical school in Delaware. The State’s medical resources, including at DHSS, are severely inadequate and rely on the professionals and the local community boards to be the driving force for superior health care. Why would legislators seek to cripple a system that is not on life support?

Did anyone consider that hospitals get bonds to fund their projects based on operational performance and balance sheets? Legislative interference would stifle a hospital’s ability to grow and demonstrate the need for bonds to invest in healthcare expansion when needed.

No one is mentioning the liability and potential detriment of care. The hospitals absorb the risk and liability resulting from poor decisions or inadequate care. Will the new Commission accept the risk if their approved budget affects the hospital’s ability to provide the care, they believe is necessary?

Further, consider the message and effect on health-related industries, such as pharma and biotechnology industries in Delaware. After all, who is next?

Healthcare is more than a balance sheet. Our hospitals are forward thinking and continually investing in current and emerging issues. Did the legislators listen to the healthcare industry or work with hospital leadership to develop a path forward? If not, beware. Government intervention in our hospitals’ budgets is a slippery slope that will require emergency intervention, and resuscitation at a far greater cost to Delawareans than, I believe, the legislature anticipates.

Ruth Briggs King just retired from the Delaware General Assembly, where she served the 37th District, and the State, since 2009. She has extensive experience in finance, banking and organizational development and owns Workforce Solutions Today, LLC with her business partner. She recently joined the Advisory Board of A Better Delaware.

 

 

Are Health Care Benefits Intended for Veterans Being used to Benefit Illegal Immigrants?

By: Hon. William L. Witham, Jr., Advisory Board Member, A Better Delaware

Veteran benefits, including health care, are not just a nice perk for veterans. They are something earned through the service, and often sacrifice, of our armed forces, dedicated to defending our country.

Recently, there has been a lot of debate about access to appointments and health care provided to veterans, here in Delaware and around the country. There is a great deal of concern that the Department of Veteran Affairs (VA) is diverting resources from veterans to provide health care for illegal immigrants in the custody of Immigration and Custom Enforcement (ICE)

There has been a long-standing arrangement between the VA and ICE to process claims for illegal immigrant medical care. It is an interagency agreement with the VA and ICE Heath Services Corps (IHSC) to provide health care claim processing and referral services for illegal immigrant patients. The cost of the care is to come from the ICE budget. Although it has been in place since 2002, members of Congress, prior senior level VA administrators, border control agents were recently surprised to learn of this arrangement. When they became aware, they held hearings, and proposed legislation to be sure no resources are diverted to prevent or delay health care for our veterans.

Darin Selnick, who served as Veterans Affairs Adviser on the Domestic Policy Council during the Trump administration and also as a senior adviser to the VA Secretary, said the arrangement was a surprise to him and others he knew that served during the administration. He believes it would have been stopped if it were more widely known among officials. He further points out, “In my position, we would have stopped this, because if the VA had the extra ability to do this, then they should have been doing it for the veterans and not for another agency.”

It has been difficult to know exactly what the costs are, how they are adjusted, and whether VA health resources are diverted from veterans. The administration claims that the VA does not provide any funding for health care to ICE detainees. It claims that only 10 employees are funded by ICE – the same number that was funded in 2002. But the increase in numbers is staggering. In fiscal year 2021, ICE budgeted more than $74 million for payment to the VA for referral and medical claims processing. And, in fiscal year 2022, the VA staff processed 161,538 immigrant health care claims. These numbers call into question the claim that there are only 10 people at the VA handling these matters. At the same time, the VA reports that, in 2023, there was a backlog of 378,000 claims by veterans, and that they took an average of over 125 days to process. The VA expects the backlog to grow in 2024. It strains credibility to suggest that there has not been an adverse impact on veterans and their access to timely health care as immigrant claims seem to have been prioritized.

Further, the VA allows illegal immigrants to access the Community Care Network Providers, a system that allows veterans to receive care, covered by the VA, at non-VA facilities. The use of these centers is intended to provide more timely medical care to veterans. Adding additional demand on those resources necessarily affects access to care for our veterans.

All these circumstances lead to ever increasing pressure on federal resources, particularly the VA, to provide assistance to the unlimited inflow of immigrants. We cannot and should not divert the limited resources we have to provide health care to our veterans. They should be our first priority.

Witham is a retired Kent County Resident Judge who has served over 40 years in Delaware’s justice system. He is also a former leader in the US Army Reserve and National Guard with 34 years of service.

 

Delaware’s Labor Drought: Challenges and Solutions

By: Jane Brady, Chair, A Better Delaware 

We are all aware of the ridiculous amounts of money that the federal government was offering states during the pandemic. Many of those states, including Delaware, used the money to increase unemployment benefits, far exceeding any amounts paid in the past, and to continue those payments far longer. After the pandemic was declared to be over, our workforce was significantly smaller than before the pandemic. There are several reasons for that. Many workers enjoyed working from home and did not want to return to the office. More remarkably, in some instances, the worker would have had to take a pay cut to return to work. And, of course, expanded workers’ compensation payments were a big reason for that.

As time has gone on people are still leaving the workforce. According to WalletHub, in February 2024, Delaware has the highest rate of job resignations in the country. Last year, we were number 6 among all the states for job resignation rates.

Each year, the US government calculates the labor participation rate, which is the number of people over 16 years of age who are employed or actively seeking employment, divided by the total number of people in that population who are available or eligible to work or actively seek work. Students, retirees, disabled individuals or people who are voluntarily not interested in working are not included in that calculation. In Delaware, approximately 60% of all eligible and available workers are not seeking work, according to the Federal Reserve Economic Date (FRED).

So, against these facts, what has the government done to try and create incentives for people to go back to work? Well, actually, the government has acted counter to that objective. First, Delaware has continued increased unemployment payments, making it more feasible to not go back to work.

Are we administering those payments accurately and with good integrity to be sure those claiming unemployment meet the requirements to receive it? Were we careful with the literally, more than a billion dollars that passed through the unemployment office’s system? Well, we don’t know.

Delaware’s State Auditor, Lydia York, recently issued a report criticizing the financial management, or rather, the lack thereof, in Delaware’s unemployment insurance office. York identified a lack of oversight, outdated systems, and limited training of the staff, so severe that independent auditors could not even determine where all the money in the system came from. Employers pay into the unemployment insurance fund for the benefit of those employees who leave their workplace and are determined to be eligible to receive unemployment compensation. A great deal of money passed through the unemployment insurance fund as a result of the Covid pandemic and federal monies. In fact, $1.4 billion, according to the Delaware’s unemployment insurance office, was paid to over 100,000 people in the first two years of the pandemic. Poor training, the influx of significantly more money, expanded eligibility and an increase in claimants all served to overwhelm the capacity of the computer management systems and staff alike. It is not known how many people are receiving payments who should not be, and how much money those payments represent. Steps need to be taken to improve the hardware and better manage the monies paid into the fund by Delaware’s businesses.

Abut at least as significantly, Delaware’s occupational licensing requirements, which is a form of government regulation, affects workforce participation. Delaware has among the strictest licensing requirements for certain occupations in the country. These types of regulations have been found to deprive millions of Americans of opportunities and career advancement, and as a result, drive up the cost of goods and services. A recent report by the Institute for Justice found that the effects of licensing regulations impact particularly low-income Americans, who already struggle to find work and open small businesses. The training or classes to comply are expensive and take time to complete.

These regulations also limit employment mobility, especially across state lines. Delaware’s current shortages of teachers, doctors, nurses and other professional service workers has been attributed to outdated licensure requirements which are too restrictive. We all want capable and competent professionals in those jobs, but our requirements keep entirely capable and competent workers from locating here or advancing in their careers. One of the most recent examples is Naaman Center, which has been working for nearly a year with Delaware’s Health and Social Services Department to secure the certificates and licensure the agency requires to provide substance abuse treatment. This is an organization that has other facilities in Pennsylvania and has been in the business of providing treatment for over 2 decades.

Delaware needs to make a commitment to improve opportunities for workers in order for businesses to attract and retain quality employees, and for businesses to locate here and thrive. We have written about the shrinking economy in Delaware, many have written about the fact that our kids leave the state for better employment opportunities and there is much documentation about the shortages of professionals in our schools and hospitals. It is time for leadership in Delaware’s government to recognize we need to improve our schools, reduce regulation and red tape, and provide the kind of work and business climate that attracts and retains the best and brightest for the benefit of our citizens.

 Jane Brady serves as Chair of A Better Delaware. She previously served as Attorney General of Delaware and as a Judge of the Delaware Superior Court.

 

 

 

Government Running Business Is a Bad Idea

By: Jane Brady, Chair, A Better Delaware

Delaware’s Government clearly does not run like a business. It never has. But some in our state’s government think they can run a business better than the business can.

HB 350, a bill pending in the Delaware General Assembly would give a review board, comprised of five members appointed by politicians, the authority for “review and approval of annual hospital budgets” according to the synopsis of the bill. In the interim, before the review board is appointed and ready to undertake responsibilities, the bill limits what the hospital can charge for services.

There are a number of problems with the concept. First, the sponsors assume that the cost of health care is governed by hospital costs. There are many factors other than the cost of hospital services that affect the cost of health care, including the costs of prescription drugs, shortages of doctors and nurses and lack of competition.

The sponsors also ignore several less intrusive ways to manage the issue and to better address their concerns.

This bill is not about the quality-of-care patients are receiving and does not expand access to that care. It is prompted by the high cost of health care for state employees and retirees. There has not been an increase in premiums for state health care recipients in about seven years. Regularly adjusting the premiums to costs makes sense in every other employer’s office. Our government should try it.

Studies have consistently shown that eliminating the Certificate of Need Laws would lower costs and improve access. Delaware is one of only a few states that still retain this harmful law. We should repeal it.

Delaware hospitals should comply with federal requirements and adopt practices that make the cost of procedures more transparent so patients can make informed decisions regarding where to seek treatment. Resistance to competition could result in a state takeover of health care, as this bill demonstrates.

Our hospitals are non-profit entities and are required to file reports with the state each year identifying what money they raise, how they spend it, how much of it they retain and for what purpose. Government officials can easily review those to be sure the hospital is performing the public services it promises. If they are showing a profit, or do not have designated, service-related purposes for reserves, then action can be taken.

But the way this bill would work is to substitute the judgment of political appointees over that of the experts and administrators of these facilities. Indeed, the primary sponsor of this bill said that she believes “hospitals should invest in doctors, nurses, medical equipment and the health of our citizens.” If they don’t do so in a way that meets her, and others’ approval, the politicians will decide how the money is spent. And there is no contention that will improve quality of care or access to care. Indeed, several professionals testified in the legislative hearings expressed concern that the bill would “create an environment where programs serving people with special needs, such as those with Down syndrome or cerebral palsy, would be sacrificed due to cost.”

This is socialized medicine by any other name. But this is not the first time that the government has intruded into the business of business. The federal government decided you should not be able to buy incandescent lightbulbs anymore, and they are gone. More recently, Delaware’s government has told car dealers what kinds of cars they must sell. There is no justification in the financial return or consumer demand for these state-imposed requirements. Not surprisingly, it is not going well. Manufacturers are cutting back on the number of electric vehicles they are making because the demand is simply not there.

These decisions made by our government to intrude into the corporate board room are not based on public safety concerns or citizen welfare. They are based on preferences or the costs for government. This is a dangerous precedent. We have a robust corporate community in Delaware because we have carefully crafted our laws and practices to make it desirable to incorporate here.

The State is intruding into the hospitals’ business because the State thinks it has to pay too much. What is to prevent the government from deciding to tell contractors (construction, IT, etc.) what they can charge and review their budgets to be sure the state is getting a good price, and the owners aren’t keeping too much of the profits for themselves?

There is a legal concept called the “business judgement rule.”  In essence, it allows a business to act in its best judgment. Those making the decisions are, generally, well trained and experienced in the business practices and nuances of their industry. Government has never had to meet a bottom line. It can simply raise taxes or spend in deficit. Businesses should not be run by individuals who are uninformed and lack the expertise to exercise good judgment in the business world. We are jeopardizing our standing as a place to do business if we enact this bill.

And, while we are discussing budget scrutiny, perhaps we should put together a committee to review the Governor’s budget and examine how the state of Delaware spent nearly $4 billion in surplus dollars (surplus means more than we needed to meet our budget) over the last three years. I expect there would be resistance.

HB 350 is a bad idea for all Delawareans. It puts our government in charge of private matters, creates a precedent that jeopardizes our economy, and continues a bad trend to inject priorities other than the success of a business into decision making.

Jane Bady serves as Chair of A Better Delaware. She previously served as Attorney General of Delaware and as a Judge of the Delaware Superior Court.

 

 

 

 

 

Students: A Hidden Homeless Population

By: Beth Conaway, Advisory Board Member, A Better Delaware

We have all seen pictures of homeless encampments, under bridges or on the streets in an urban downtown. But unfortunately, there are many homeless individuals that are not so evident to the public. One group of such individuals is students in our public schools.

These children are often displaced from stable housing by domestic violence, poverty or uninhabitable living situations, which could be the result of neglect by a landlord, but also often results from crime or other events that cause damage to their home.

During the 2021-2022 school year, the Delaware Department of Education identified 3,434 homeless students in Delaware. These students face a range of challenges that can impede their education and overall well-being. The Department of Education has worked to address those challenges.  The McKinney-Vento Homeless Assistance Act is a federal law that provides certain protections and support for homeless students. All public schools in Delaware must adhere to the provisions found in the Act.

The Delaware Department of Education defines homelessness as a lack of a fixed, regular, and adequate nighttime residence. This includes children who make a temporary move to live with others as well as children who live in motels, hotels, campgrounds, transitional shelters, or public or private places that are not designed for, or ordinarily used, as a regular sleeping accommodation.

Every school district has one or more staff that is designated as a school liaison with these homeless students. The liaison is responsible to inform parents or guardians of educational and related opportunities that are available to their children.  This information includes services provided under the McKinney-Vento Act.

One of the main tenants of the Act is the term “school of origin”. Under the McKinney- Vento Act, a child or the parent or guardian has the right to request to remain in the same school they attended before they were displaced. This can result in long rides to and from schools and costly transportation expenses. For example, a student attending a school in Dover may become homeless and find temporary housing in Georgetown. When this occurs, the McKinney-Vento act requires a “Best Interest Meeting”, between school’s liaison, school personnel and the parents or guardians of the student.  Those guardians may very well be the state’s social workers if the student is at risk of harm and the state takes custody.  The meeting must be held before a student is removed from their current school and before any school placement decisions are made.  Its purpose is to ensure continuity in the child’s education.  Schools can provide transportation services such as picking up students at their homes in vans, providing bus passes or vouchers, and even offering flexible school start times to accommodate travel arrangements. This transportation is paid for by the original school district. In some cases, enrollment disputes occur between the families and the schools. These disputes are mediated in accordance with the Enrollment Disputes section of the McKinney-Vento Act.

Students who are classified as homeless are also entitled to additional services, such as immunizations, and many schools also have established food pantries, clothing closets, and hygiene product distribution programs.

Even with these supports, homelessness often disrupts academic progress and social connections.  According to the National Center on Family Homelessness, 75% of homeless elementary school students in Delaware perform below grade level in math and reading, and 85% of high school students do. They often also face health and safety risks associated with living in unstable or unsafe environments. In addition, stigma and social isolation may result due to their housing situation.

As a result, providing targeted responses and accommodations can help ensure that homeless students have the support they need to succeed academically and thrive despite their housing instability.  The cost for these supports is high and must be recognized by state and local officials to ensure that the necessary funds are present to support the students, the families, and the schools.

Beth Conaway is a former teacher, who served for eight years as Principal of the Morris Early Childhood Center and then as Principal of Milton Elementary School for five years. She retired after 31 years in the Delaware public school system. Currently she teaches graduate courses at the University of the Cumberlands and volunteers in the Indian River School District.