Jury Out on Kitzhaber Performance

Jack Roberts in a column last week gave Governor Kitzhaber credit for keeping two of his campaign promises – strengthening education and transforming health care. However, it is too early to call health care transformation a success. The work is just starting and faces a major hurdle of achieving significant cost reductions, which legislators counted on to balance the budget over the next two years.

On education, Kitzhaber pushed through legislation giving him the reins over education from pre-school through graduate school, but that authority doesn't come fully into effect until the current elected superintendent of education fills out her term.

Governor Kitzhaber meets with SEIU members after union leaders approved a new contract with the state.Roberts criticized Kitzhaber for failing to curb state employee costs, even though the largest public union in Oregon just ratified a new contract requiring state employees for the first time to pay a portion of their health insurance.

Health Care

Kitzhaber asked the legislature to create "Continuing Care Organizations (CCOs)," local entities spread across the state that would take responsibility for organizing and providing health care services to Oregon's low-income citizens who are eligible for Medicaid. Lawmakers complied, but said they would review specific CCO formation issues in their February legislative session. So, no CCOs have been formed yet and many major health care organizations are taking a wait-and-see attitude about whether to lead, participate or pass on the CCO business.

The governor has appointed more than 130 advisors who are working on reports for the February 2012 legislative session, including one on "global budgeting."  Some observers suggest global budgeting may just be a new synonym for "capitation," which marked the failure of the Health Maintenance Organization (HMO) movement several years ago when HMOs were supposed to manage budgets and, in the process, turn down coverage requests. Whatever the perception, global budgeting is a serious issue because it means that the yet-to-be-formed CCOs must bear the risk of the services they organize and provide for the low income population.

And, what's more, the 2011-13 legislatively approved budget for the Oregon Health Authority requires that the new CCOs save $240 million in the second year of the biennium, a tall order, one many say simply cannot be achieved.


Under Senate Bill 909, approved by the 2011 legislature, an "Education Investment Board" will be created to oversee and control all of education, from kindergarten through graduate school. Some observers wonders if the normal fiefdoms in education will still prevail no matter what Kitzhaber wants from his transformation proposals.

This was illustrated last week when the Oregon Education Association weighed in with what Roberts called a "tantrum" by issuing failing grades to many legislators, including many Democrats who have been long-time OEA allies.

Part of the Kitzhaber effort also calls for changing the way early childhood programs are delivered in this state and that, too, is marked by wholesale changes, including the likely demise of the Children and Families Commission.

State Employee Compensation

Here, it is possible to disagree with Roberts who said Kitzhaber had not done much. He did win concessions from major state employee unions, including a decision last week by rank-and-file members of SEIU to accept a new contract that, among other things, calls for them to begin paying part of their health insurance bills each month. Members of AFSCME also have agreed to that approach.

Health care cost sharing stands as a major victory for Kitzhaber, who was in the difficult position held by all Democratic governors – having to preside over collective bargaining negotiations with their supporters in the public employee union movement. Some Republicans often wonder if Democratic governors are capable of negotiating hard-nosed agreements with those who have supported their candidacies.  Kitzhaber's performance shows it is possible.

Overall, it is probably too early to produce a jury verdict on the governor's early months in office. Transforming state government will take time.  Many employees tend to react to new gubernatorial initiatives by saying "this, too, will pass" – and they often are right.  

This time, the governor has set the stage by laying the foundation for change in health care, education and state employee issues.  Now, he is on the hook to produce the promised changes.


The writer, CFM partner Dave Fiskum, worked for the last Republican governor, Vic Atiyeh, has served under other governors and has been a lobbyist at the Capitol for more than 20 years, including for major health care organizations.