Op-Ed: Senate Bill 1 Threatens Delaware Healthcare

By Terry Murphy, MHSA, FACHE, President & CEO, Bayhealth

Op-Ed: Senate Bill 1 Would Further Strain Healthcare Access and Growth for Delawareans – We Must Choose Collaboration, Not Cuts

If you drive across the Pennsylvania line near the airport, you’ll see the shuttered Crozer-Chester Medical Center — a once-vibrant 360-bed hospital now dark and silent. The hospital system closed on May 2, 2025, resulting in more than 2,600 layoffs of nurses, physicians and frontline staff and leaving hundreds of patients without access to a local hospital. That is what happens when decisions about health care are made by people who don’t fully understand the consequences.
Today, Delaware faces a similar risk. This time from our own state government.

Senate Bill 1, introduced earlier this month by Senate Majority Leader Bryan Townsend, revives the most damaging provisions of the House Bill 350 we successfully defeated in 2024. Framed as primary care reform, the bill would impose artificial 250% of Medicare reimbursement caps on inpatient and outpatient health care services in Delaware. The bill also gives sweeping new rate-setting and value-based care authority to state bureaucrats rather than the clinicians and experts who actually deliver care.

The numbers are staggering. Delaware hospitals would lose up to $413 million annually statewide. At Bayhealth alone, our analysis shows an impact of approximately $75 million per year. That is money we currently invest in expanding access to patient care, workforce recruitment, technology and community programs.
For our patients, it would mean:

• Longer wait times for doctor appointments and procedures.
• Slower or halted expansion of critical services, including our Kent Campus Vertical Integration Project, the new Medical Office Building on our Sussex Campus and expanded clinical services at Blue Hen.
• Reduced ability to expand primary care in a state that is the fifth-oldest and sixth-fastest-growing in the nation, with high rates of chronic illness.

Bayhealth employs hundreds of Delaware’s primary care physicians — part of the more than 500 hospital-employed primary care providers statewide. We already absorb more than $70 million in annual losses just to keep those services available because reimbursement simply doesn’t cover the full cost of salaries, support staff and infrastructure. SB 1 would make recruitment and retention even harder at the exact moment we need more primary care, not less.
Statewide, up to 4,000 health care jobs are at risk in an industry already battling national shortages.

Everyone agrees that health care affordability matters. Bayhealth has worked in good faith with policymakers for years to address costs while protecting quality and access. We support the goals of strengthening primary care. But SB 1 is the wrong way to get there. It ignores the collaborative work already underway.
We have better options on the table right now. The Primary Care Reform Collaborative — which included hospitals, legislators and the bill’s own sponsors — recommended extending Delaware’s existing primary care law by at least two years while we explore sustainable value-based models. The new Diamond State Hospital

Cost Review Board already provides unprecedented transparency and accountability for hospitals. We should build on these efforts, not undermine them with arbitrary cuts.

Bayhealth strongly opposes Senate Bill 1 as currently written because we have seen what happens when policymakers or outside forces make decisions without fully understanding the real-world impact on patients, clinicians and communities. Crozer-Chester stands as a sobering reminder just across the state border.
Delaware deserves better. We have the talent, the commitment and the track record to lead the nation in health care. Let’s stay focused on the Primary Care Reform Collaborative’s path — the one that protects access, supports our workforce and keeps our patients at the center.

We urge legislators to reject Senate Bill 1 and work with us on solutions that strengthen, rather than weaken, the high-quality care Delawareans count on every day. And we urge our community to learn more about the bill and contact their lawmakers as time is of the essence.