Health Care Reform: Apples and Oregons

Oregon's health care system will look remarkably different by 2020, despite promises by Republicans in Congress to derail the health care reform legislation signed by President Obama last spring. Why? Because the Oregon legislature passed House Bill 2009, which requires health care reform at the state level, nearly a year before "Obamacare" went into effect.

While pundits are focused on the national battle over health care reform, the Oregon Health Authority quietly is hiring staff and making decisions about how to implement the provisions of HB 2009.

Many of the elements of HB 2009 are similar to the federal legislation. Oregon's timeline is similar, requiring full implementation by 2019. Oregon will have an Insurance Exchange by 2014, as required by the feds, and it will study the viability of a public option. HB 2009 requires changes to the way the delivery system works, including the organization of physicians into "medical homes." And it places emphasis on prevention by implementing financial incentives.

HB 2009 goes further than federal health care reform does, in several ways. First, a workgroup is looking at the best way to reform medical liability as a means of reducing health care costs. HB 2009 also places a heavy emphasis on public health and education (think flu shots and hand-washing campaigns), an issue the federal bill mostly ignored.

The Oregon Health Authority is a new state agency created by HB 2009. OHA staff have been working with the Department of Human Services and the Department of Consumer and Business Services to transition most health care-related divisions to the OHA, including health insurance regulation, public health and the Oregon Health Plan.

The OHA and its governing body, the Oregon Health Policy Board, also are working to integrate public employee benefits into the new system. Public employees eventually will get their health benefits through the state's Insurance Exchange.

Legislators and the governor will need to approve the OHA's recommendation that the Insurance Exchange should be structured as a public corporation, much like SAIF or OHSU. Current recommendations provide for a small pilot exchange to begin operation in 2012 or 2013, with a fully-operational exchange in 2014 for small and mid-sized employers. Large employers (more than 100 employees) will be allowed to participate in 2017.

Many of OHA's recommendations, developed over the last year and a half, will need legislative approval, while others will require a change in agency rules.

HB 2009 will require modifications and fixes from the legislature to make it better over the next decade, as all of its various parts are implemented. The legislature also will grapple with how to finance these huge changes in the health care system as it prepares for what Governor Kulongoski's reset team deemed a "Decade of Deficits."

HB 2009 is supposed to save money for the state and for all Oregonians by reforming the broken health care system. But it will cost money in the short-term to make those changes, money the legislature will struggle to come up with as revenues continue to decline.