Analysis in CRI’s “Delaware Health Care Initiative” paper clearly evidences that due to a lack of competition, Delaware has among the highest priced health care in the nation. And more evidence of the consequences of the lack of competition is surfacing.
Last week, the News Journal reported that Christiana Care has been charged in Federal District Court for providing kickbacks to independent doctors in exchange for lucrative Medicaid patient referrals. This may help to explain why state Medicaid charges to the Delaware General Fund are rising at 7% to 8% a year, currently close to $750 million.
In 2005, Christiana Care settled a similar case of Medicare and Medicaid fraud for $3.3 million.
A report from Fitch Ratings service shows that this lack of competition in hospital health care services extends to southern Delaware. In its financial profile, Fitch claims that Bayhealth Medical Center “maintains a dominant position in its primary service area, with a stable market share around 80%.”
Bayhealth recently filed an application to form an Affordable Care Organization with Christiana Care and Nanticoke Health Services for participation in a statewide Medicare shared savings program. Together, the three systems control over 75% of inpatient admissions in Delaware.
From their 2015 Form 990s, the “nonprofit” Christiana Care had almost $1.3 billion of investments in publicly traded stocks and other securities and Nanticoke had $573 million.
Facing limited competition, Delaware’s major hospitals charge high prices, have substantial net earnings, and have experienced fraud. Elected officials, with their need for campaign funds, are unlikely to reign in this behemoth. The proven solution is increased competition.
By Dr. John Stapleford, CRI Chair
January 10, 2019