The creation of a Diamond Review Board is not a "gem". While the recent bankruptcy filing of Steward Health Care System LLC. and its many hospitals have appropriately raised alarms as to the oversight necessary for hospital and provider systems, the creation of a politically appointed board with the potential to modify and approve hospital budgets seems to skirt significant areas where oversight may well be warranted. In Massachusetts, where a number of the Steward hospitals operate, the hospital owners, according to the Massachusetts Attorney General, extracted value from the hospitals to, among other reasons, pay substantial dividends to investors and expand their network in other states. The Massachusetts attorney general has said that over-leveraging hospitals and imposing exorbitant and unsustainable rental obligations created an untenable situation.

The Delaware legislation seems a blunt and unnecessary overreach of governmental authority. Establishing a new bureaucracy when, as one Delaware legislator has suggested, Delaware isn’t really managing its own healthcare plans, seems likely to be creating new problems. Maybe a frank discussion about permitting certain hospital mergers and their impact on the communities, like what could have taken place in the Steward situation, increasing reimbursement rates and other financial solutions could be getting closer to solving the financial problems.


About the author: Robert J. Kerwin is the general counsel for IAMERS, the International Association of Medical Equipment Remarketers and Servicers.

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