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Entries in cost shifts (1)

Monday
Jun112012

Surprise Decision Strains Reform Support

The decision caught almost everyone by surprise last week. The Governor's Office and the Oregon Health Authority said they would not make any of the $2 billion in new federal money obtained by the Administration available for the first year of health care reform in Oregon.

"Members of the new groups (Coordinated Care Organizations, CCOs) are crying foul," reported The Oregonian, "after a directive Thursday that they'll receive no new funds for the additional responsibilities they've agreed to take on — mental health care, prevention efforts, quality measurements and new patient-care staff, among others."

In fact, managers of the new, still-not-yet-approved CCOs have been told they will have to live with last year's rates, which themselves represented an 11 percent cut. Leaders of the new groups say their success relates directly to the new money to fund them. They say it takes money to revamp care for more than 600,000 Oregonians covered by Medicaid, the joint federal-state program that provides care for low-income citizens.

In touting health care reforms such as CCOs and the Health Insurance Exchange, Kitzhaber has stressed the need to control costs through competition and innovation.

For many in the health care reform orbit, all of this conjures up images of the original Oregon Health Plan more than 15 years ago, also designed by Governor Kitzhaber in his earlier service as Oregon Senate President and as governor in his first term. A key tenet of the plan then was that providers would be paid close to their costs for delivering services. The clear objective was to limit the cost shift onto the backs of private health insurance payers.

Well, that tenet apparently has been lost in the intervening years.

Today, those with private health insurance pay about 20 per cent more in premiums as they bear the "hidden tax" of paying for Medicaid underfunding. In a 2008 study, the Milliman Group estimated underfunding of Medicaid and Medicare amounted to more than $90 billion annually.  Though four years old, the study is still applicable today.

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