Delaware Moves Forward on Comprehensive Health Care Cost Measures

Massachusetts isn’t the only state making progress when it comes to measuring health care costs. Delaware is also moving forward with its own approach.

Delaware’s Secretary of the Department of Health and Social Services (DHSS) Kara Odom Walker was tasked with leading this effort. The Fund assisted the secretary’s work by sharing policy lessons learned from the Totals Cost of Care initiative and identifying experts in other states who could be helpful, such as David Seltz, Executive Director of the Massachusetts Health Policy Commission.

What happened recently:

• In February 2018, the governor issued an Executive Order establishing a formal advisory committee to focus on health care spending and quality measures, as well as variations in health care delivery and cost. This committee is expected to make its recommendations in June, and further activities will be planned accordingly.
• DHSS then developed a toolkit for legislators that provides information about benchmark benefits and strategies for success, a resource that might be helpful to policymakers in other states as they work on total cost of care.

How Delaware got started:

• In 2017, Delaware’s governor and legislature called for the development of a health care cost benchmark to measure and serve as a baseline to rein in health care cost growth. Signing a joint legislative resolution, the governor noted that “The health care spending path we are on is unsustainable…. The health care spending benchmark will provide us with the opportunity to transform the way we pay for health care and link that cost to the state’s overall economy. The two should go hand in hand.”
• DHSS spearheaded the planning effort. To address the issue, the state gathered and analyzed data and organized public meetings to get input on governance, data analysis, and legal issues related to setting a benchmark. DHSS then formulated recommendations submitted to the legislature in December, including:
  • The state should develop benchmarks for cost and quality;
  • Data on variations in health care delivery and cost should be analyzed and given to providers to help identify factors driving cost growth;
  • The state should use its purchasing power for state employees and the Medicaid program to advance new value-based payment models;
  • Physicians, particularly those in small practices, will need technical support to participate successfully in these models; and
  • The state’s strategy for controlling cost and improving quality needs to address the role of social determinants of health.

“In our study of state models for health care cost measurement, we learned that developing broad-based measures to control health care costs require leadership direction and stakeholder buy-in, combined with good data and analyses,” said Rachel Block, program officer at the Fund. “Delaware’s formula offers a promising model to address all of these components.”