Delaware Healthcare Industry Blog

Healthcare & The Governor’s Budget

As Joe Biden once quipped, “[d]on’t tell me what you value; show me your budget and I’ll tell you what you value.” January 24^th is budget day in Delaware. The day to see Governor Carney’s values.

The Governor gave his address at 11 am at the State Archives to a packed room of journalists, legislators, and stakeholders. That afternoon, the two “money bills” representing the state budget were filed. So, let’s talk healthcare and the Governor’s Recommended Budget (GRB) of $4.433 billion.

The first steps of any budget are the “door openers.” These are the natural inflation of costs in the existing budget. Key among these $60m of drivers is healthcare. This year, an extra $15m in Medicaid and $1.1m in corrections’, medical, and pharmacy costs.

Two new features of this GRB were through executive order: Budget Smoothing and the Healthcare Benchmark. Executive orders 21 and 25, respectively. We’ve discussed the benchmark before, but as a reminder, it’s the Governor’s efforts to put downward pressure on healthcare costs, creating a benchmark at 3.8% growth, roughly matching the state’s growth. It is not, however, a cap, but a target and subsequent transparency metric. This year’s budget is the starting point for future measurements. As Governor Carney called it, “our most difficult challenge.”

While much of the address was focused on education and jobs, here are a few items to draw attention to:

• $1.5m for school-based wellness centers for schools in Wilmington
• $2.9m for child welfare investigations
• $1.1m for inmate medical services, including substance use disorder treatment
• $1.8m to support recommendations from the Lt. Governor’s Behavioral Health Consortium
• $3.2m for CHIP, which leverages federal dollars
• Aggregated $5.8m for outside non-profit services for adult and child physical disability services and a market increase from 2011 to 2015 payment levels in Purchase of Care

Of course, as the saying goes: “the Governor proposes, the legislature disposes.” Far from being the end of the conversation, the governor’s budgets will now go under the pen of the legislature’s Joint Finance Committee (JFC). Noteworthy this year is new JFC House Chair, Rep. Quinn Johnson, the former Chair of Bond.  Also, there are numerous new faces, both in the House and Senate, including the nearly-unheard of inclusion of a freshman senator, Sen. Laura Sturgeon.

These hearings, mark-up, and then votes will take the balance of session, with traditional passage of the two budget bills as the last (or near-last) items in the wee hours of June 30^th.  But we'll be back to update you before that.

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