Promise of Cash Makes Reform Vote Likely

The promise of federal money and a reluctance to make deeper cuts in Medicaid probably assure that Governor Kitzhaber's health care reform legislation will gain approval in the upcoming February session.Governor Kitzhaber and one of his health care gurus — Dr. Bruce Goldberg, head of the Oregon Health Authority — returned from Washington, D.C. a couple weeks ago with a load of cash. They reported the Obama Administration promised to help Oregon continue reforming its health care system with $2.5 billion over five years.

As always with such pledges, some observers will say "show me the money."  But the Kitzhaber/Goldberg report made headlines just as legislative committees met at the Capitol to prepare in earnest for the February legislative session, at which health care reform will be one of the big topics.

Embodied in Legislative Counsel bill draft #97, the details of a key reform — Coordinated Care Organizations (CCOs) — made its debut. The idea is to focus care, especially for low-income Medicaid recipients, closer to where they live around the state.

News of the prospective $2.5 billion to finance reform probably came close to assuring that the legislature will pass reform legislation in February. It will be almost impossible to say no.

Here are other developments from last week's legislative committee meeting days:

       *  Three officials — Goldberg; Eric Parsons, chair of the Oregon Health Policy Board; and Mike Bonetto, the governor's health care policy assistant — gave House and Senate committees a report on reform progress and received a respectful reception.

       *  A group of health care policy leaders from the Portland metropolitan area, led by Greg Van Pelt, CEO of Providence Health & Services, and George Brown, CEO of Legacy Health System, updated lawmakers on progress to form a CCO that would organize care for citizens in the tri-county area.  The group, which has been meeting for three weeks and intends to keep working, calls itself the "Tri-County Medicaid Collaborative." It was viewed as a significant development because so many organizations – about 30, including health systems, insurers, counties and MCOs – have taken the initiative to follow-up on the governor's health care transformation vision. Similar, though smaller efforts are under way in other parts of the state.

       *  Representatives of "managed care organizations" (MCOs) — the existing entities that organize care for Medicaid clients — were visible at the Capitol trying to figure out ways for MCOs to receive special incentives to become CCOs. Such incentives could end up being controversial.

As legislators consider L.C. #97, there will be a number of critical issues to resolve. What is the proper balance between state mandates and local flexibility in forming the new CCOs? Will certain populations of recipients be “attributed" to CCOs so they can begin assuming responsibility for one of the so-called "Triple Aims" of reform — improving health? How will the new CCOs be governed at the local level? Will tort reform protections be provided to the new CCOs? How will the ability to bear the risk of potential expensive health care services be measured in the new, yet to be created CCOs? How will the differences between urban and rural Oregon be sorted out?

All of these questions will take time and energy to answer. But there are now at least two reasons why health care reform is almost assured to move forward in February. The first is the lure of the new federal money that Kitzhaber and Goldberg say is on tap for Oregon. The second — and a factor that distinguishes health care reform from any other Kitzhaber reform initiative — is that the Medicaid budget has already been cut by a total of $239 million in general funds in the second year of the 2012-13 biennium.

That twin reality will imbue private sector leaders with a sense of commitment to proceed.  And legislators will be more comfortable reforming, with millions of dollars at stake, than just cutting budgets.