(Dover, DE – March 12, 2026) – Real-time hospital modeling shows the financial and workforce impact of Senate Bill 1 may soar to $413 million in annual cuts and 4,000 jobs risked, nearly 3 times initial projections, according to the Delaware Healthcare Association.

“We need healthcare solutions that will close the gaps, not close hospital doors. The reference-based pricing policies in Senate Bill 1 will lead to decisions no one wants to make: Layoffs and even fewer services in high-needs areas of our state,” said Brian Frazee, President & CEO of the Delaware Healthcare Association. “This takes Delaware healthcare backward. We’ve already said no to these bad policy decisions in HB 350, and we have to come together and say no to SB 1.”

The American Hospital Association’s 2026 Cost of Caring Report highlighted workforce spending as hospitals’ top expense, accounting for 60% of total expenses. In Delaware, the workforce remains a top line item with labor expenses growing 30% from FY 20 to FY 24, according to a DHA analysis of member hospitals. Hospitals must cover labor costs and more to keep their doors open 24/7/365 and still care for everyone, including the uninsured. Collectively, there are more than 30,000 acute care hospital workers, including more than 500 primary care providers.

“To attract and retain doctors, nurses and allied health professionals, we need strong hospitals. Siloed policies like Senate Bill 1 will not enhance recruitment and retention at a time when we need more health care, not less, in our uniquely growing and aging state,” Frazee continued.

Delaware is the top-ranked state in the country for hospital quality. DHA is concerned that SB 1 will undermine that progress and:

• Risk healthcare jobs – 4,000 hospital and healthcare workers are on the line.
• Replace experts in decision-making on hospital rates and value-based care.
• Cut healthcare services – $413 million annually statewide – for Delaware hospitals, their patients, and communities.
• Reduce primary care access. As the largest employer of primary care physicians, targeting hospital resources undermines the primary care networks Delawareans rely upon.

“There is a path forward; it’s just being ignored,” said Frazee. “It’s time to put aside the politics and do what is best for Delaware patients and communities: Collaborate on real solutions for affordability that don’t risk an entire sector’s workforce and service output.”

DHA and its member hospitals are already leading the way on healthcare affordability:

• DHA joined state leaders on the Primary Care Reform Collaborative to recommend a minimum two-year extension of the state’s primary care law, so active discussions on sustainable value-based care models can continue. Ironically, the House of Representatives’ and Senate’s sponsors of SB 1 voted to support this very recommendation.
• Hospitals are the only entity in the healthcare system held accountable to Delaware’s healthcare spending benchmark through the Diamond State Hospital Cost Review Board, active since January’s passage of SB 213.
• DHA is actively working with the state of Delaware to explore value-based care initiatives to improve health outcomes and reduce the cost burden on states, without sacrificing quality or access.

Frazee reiterated that DHA remains ready to work with the bill’s sponsors, the Department of Insurance and all stakeholders to find a path forward that preserves Delaware’s national leadership in quality care.

The $413 million annual projected cut to hospital and healthcare services and jobs resulting from SB 1 – up from an initial $165 million – reflects input from finance experts on a likely market shift. They believe that as a 250% Medicare cap is imposed on the fully insured and state health plan markets, self-insured plans will migrate to the fully insured plan market, effectively applying the rate cap to all health plans in Delaware. Hence, a larger cut of healthcare resources and services. This is consistent with estimates by bill sponsors that SB 1 could result in reductions of over $442 million annually if applied across the full commercial market. The estimated cuts will impact the full spectrum of inpatient and outpatient services.

About the Delaware Healthcare Association

The Delaware Healthcare Association (DHA) advances health in Delaware through collaborative policies and partnerships. DHA represents the First State’s hospitals, health systems, and other healthcare-related organizations, which include all of Delaware’s acute care, post-acute care, behavioral health, rehabilitation, and children’s hospitals. Our vision is to Make the First State First in Health.