Governor John Carney and Secretary Kara Odom Walker
For years, Delaware has been on an unsustainable path when it comes to health care costs. We spend more on health care than all but two other states. We trail only Alaska, which has a far-flung rural population, and Massachusetts, which has universal health insurance coverage. Costs here are 27 percent higher than the U.S. average — and we do not see a corresponding benefit in health outcomes.
At our current pace, Delaware’s total spending on health care services will more than double over the next decade. That puts a squeeze on Delaware families — who have not seen their paychecks rise at the same rate — and business owners, who find it more difficult than ever to provide quality insurance to their employees.
Rising health costs represent one of the greatest economic headwinds for our state, consistently outpacing economic growth, and placing a growing strain on Delaware taxpayers. Health care costs now account for about 30 percent of the state’s budget — crowding out necessary investments in education, environmental protection, economic development, and public safety.
Put simply, we cannot afford to ignore this issue.
That is why on Thursday we will enact House Joint Resolution 7. Sponsored by House Majority Leader Valerie Longhurst and supported by members of both parties in the General Assembly, the resolution provides authority for the state to establish a health care spending benchmark with a growth rate linked to the growth of the state’s economy.
The benchmark will help us embrace the concept of paying for value and quality of care, instead of paying for the amount of services offered. Reforming our health care payment system, and setting a limit on the growth of health care costs, could allow our state to save tens to hundreds of millions of dollars per year through increased transparency, better efficiencies and system-wide innovation, while driving toward higher standards of care.
Of course, changing how we pay for health care and lowering costs should not be the only focus of our efforts. Despite our spending levels, we are not creating a healthier population. In terms of overall health, Delaware ranks 31st in the nation by America’s Health Rankings. Studies have shown that patients are not receiving recommended or appropriate care more than 50 percent of the time, according to research published in the New England Journal of Medicine.
We have to do better, and start rewarding health care providers and health care systems for keeping people healthy instead of paying for the volume of care they provide. We should also increase transparency around quality and health outcomes because it’s often difficult for people actually to know whether their doctor is the right one to help them achieve their optimal health or manage a chronic condition. This transparency also helps employers design health care plans that keep their employees in better health, while allowing companies to better spend health care dollars by steering employees to places where they will get the best quality care.
We know this works. Doctors who are compensated for higher quality care actually provide better care for their patients. Insurance plans that have meaningful wellness programs and offer plans designed to funnel members toward higher quality care are more cost-effective.
We should incentivize providers for better care and a better patient experience, at a lower cost. And new payment structures should allow those providers to share in the savings.
We must put ourselves on a path to controlling health care costs and creating healthier outcomes for all Delawareans. The health care spending benchmark builds off the work already being done in Delaware, led by the Delaware Center for Health Innovation, and will set a target for keeping health care spending better aligned with the growth of the state’s revenue and economy. Our goal is to ensure that we reverse the trend of health care spending rising more rapidly than all other spending in the state.
It also sends a clear signal to everyone in Delaware’s health care field that the state is serious and committed to this effort.
We should strive to be a state that provides better health care, at a lower cost. Delaware is a small state, with a proud tradition of working together. We should be able to get this done. Ultimately, improved health care outcomes mean our citizens can have a better quality of life, and slowing the growth of health care spending will allow us to make other necessary investments — in education, environmental protection, and public safety. As a result, these changes will make Delaware an even better place to live, work, and raise a family.
John Carney is the 74th Governor of the State of Delaware. Dr. Kara Odom Walker is Cabinet Secretary for the Department of Health and Social Services and a board-certified family physician.