Delaware Health Care Spending Grows to $11.3 Billion, Significantly Exceeding Target

NEW CASTLE - Per capita health care spending in Delaware increased to $11.3 billion dollars in calendar year 2024, an increase of about 8.7% compared to 2023. On a per capita basis, spending grew between 6.4% and 12.2%. Overall, spending growth significantly exceeded the state's 3.0% spending benchmark, according to the Department of Health and Social Services' (DHSS) sixth annual Health Care Benchmark Trend Report presented today to the Delaware Health Care Commission.

"The continued growth in health care costs underscores the urgency of this moment," DHSS Cabinet Secretary Christen Linke-Young said. "We must make care more affordable while ensuring every dollar is delivering better health for Delawareans. That means driving rapidly towards multi-payer value-based care transformation, so that hospitals, clinicians, insurance companies, and the government all face the same incentives to deliver the best health outcomes at the lowest cost."

"We must do better as a state," said Dr. Neil Hockstein, Chair of the Delaware Health Care Commission. "Delaware's clinicians and health systems deliver outstanding care every day, but the trajectory of health care spending makes clear that incremental change is no longer enough. To preserve access and affordability over the long term, we must fundamentally transform how care is delivered and paid for - the future sustainability of our health care system depends on aligning incentives around better outcomes, prevention, and keeping people healthy rather than simply delivering more services."

This year's report also introduces a new methodology for calculating per capita spending, incorporating enrollment data submitted by payers compared to the historical methodology which uses census-based population estimate. Using this updated approach, the increase in per capita spending is more pronounced and reflects shifts in coverage and enrollment following the end of pandemic-era Medicaid continuous coverage requirements. For this report, DHSS collected final CY 2023 and new CY 2024 data from commercial insurers, Medicaid, Medicare, the Veterans Health Administration, and the net cost of private health insurance.

Key drivers include inflationary pressures, rising pharmaceutical costs, increased hospital spending, and higher utilization of behavioral health services. Hospital inpatient and outpatient services alone accounted for more than $3.9 billion, or nearly 36% of total medical expenditures.

All major markets-commercial, Medicaid, Medicare, and the Veterans Health Administration-saw increases in spending. Medicare continues to represent the largest share of health care spending in Delaware, accounting for roughly 42% of total expenditures. Delaware's aging population and shifting enrollment trends also contributed to rising per capita costs.

Delaware remains one of eight states to establish a statewide health care cost growth benchmark, a target for the annual increase in per capita health care spending. The benchmark is set by the Delaware Economic and Financial Advisory Council (DEFAC) Health Care Spending Benchmark Subcommittee and is designed to align health care cost growth with broader economic conditions.

Quality benchmarks

In addition to tracking spending, Delaware measures performance across several quality benchmarks.

Opioid-related overdose deaths fell sharply in 2024, declining by nearly 40%, representing continued system-wide improvements.

Delaware did better than the benchmark in two measures in CY 2024:

• Breast cancer screening exceeded the benchmark by 0.1 percentage points among the commercial population.
• Colorectal cancer screening exceeded the benchmark by 3.2 percentage points among the Medicaid population.

Several additional measures showed improvement year over year, including emergency department utilization, and certain preventive screenings, though they did not meet established benchmarks.

However, the state did not meet benchmarks in several areas, including adult obesity, statin therapy adherence, and cervical cancer screening in the commercial population.

DHSS officials noted that while not all benchmarks were met, the overall trend shows progress in key areas and highlights opportunities for continued improvement.

An interactive quality and spending dashboard updated to include the CY 2024 trend report data released today is available at https://dhss.delaware.gov/dhcc/global.html.