Surprise Decision Strains Reform Support

Last week's announcement by the Kitzhaber Administration to withhold new federal money from health reform efforts caught the health care industry by surprise and strained relationships.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.

Doing something about the cost shift is within the power of state policymakers, who could ensure the obligations they create under Medicaid are fully or more closely funded. The reality, however, is that state health care budgets usually take a back seat to more politically popular programs, K-12 education, higher education, and cops and prisons.

Most public opinion polls today suggest that, when it comes to health care, the public wants two things — access to care when they need it and lower costs for that care. Here's hoping that public policymakers in Oregon will find the political will to do something about both objectives even as, presumably, they work to solve the current health care reform problems that threaten current progress.


         CFM partner Dave Fiskum represents Oregon health care organizations and has a history of working on health care reform in Oregon dating backing to the "Friends of Senate Bill 27," the group that designed the first Oregon Health Plan.