Friday, March 16, 2012

Oregon Healthcare Transformation

All eyes are on Oregon as healthcare transformation gets underway

On March 2, 2012 Oregon Governor Kitzhaber signed the Healthcare Transformation Bill (Senate Bill 1580) which will give managed care organizations the go ahead to set up Coordinated Care Organizations (CCOs) with the aim to strengthen patient-provider relationships and improve delivery of both care and services for the more than 600,000 Oregonians served by the Oregon Health Plan (Medicaid). The Oregon Health Authority has done a good job of putting all the information in one place on their new website at and is preparing to take applications from interested organizations to be certified by the state to become CCOs. Oregon's new CCO law will let officials assign caseworkers to manage all aspects of some Medicaid patients' care, from physical, dental and mental health, with the goal of eliminating redundant tests and procedures and reducing expensive hospital stays.

There is a great deal of interest nationally on what Oregon is up to. If this grand experiment is successful it could be a model for state level reforms around the country. And finding out what doesn't work will also help other states as they craft their own plans to deal with the terrible budget implications of skyrocketing healthcare costs. Proponents of the effort claim that if all 50 states adopted this approach then it would save the federal budget more than $1.5 trillion over the next 10 years. Detractors claim the plan over promises and will ultimately under deliver, and they are not convinced of the plan's potential for significant savings. A recent report from the Congressional Budget Office shows that pilot efforts of such coordinated care programs have yet to provide conclusive evidence of savings. "On average, the 34 programs had no effect on hospital admissions or regular Medicare expenditures," the report stated. If Oregon succeeds in this effort it would bring some evidence base to the idea that better care coordination will lower costs.

Oregon has traditionally been a pioneer in trying innovative approaches to healthcare, and Governor Kitzhaber, an emergency room physician, has championed overhauling the healthcare system. He believes the new law could keep people healthier and save money. The Governor presented his ideas to the Administration in Washington, D.C. before the legislation was passed and it was recieved with great interest. "There are several states thinking about this kind of approach," said Cindy Mann, a deputy administrator at the federal Centers for Medicare and Medicaid Services. "This is definitely a time when everybody can be learning from each other." The state has now requested federal wavers needed to implement the plan. If the plan receives federal approval, the CCOs will begin to operate as early as July 1, 2012. The hope is to ultimately expand the CCO model to include government workers and privately insured residents.

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