Governor Will Release Budget February 1
Kitzhaber emphasized the need to transform the healthcare delivery system when he spoke before the Oregon Health Policy Board
The governor made that point quite clear when he appeared before the Oregon Health Policy Board on Tuesday afternoon.
“We’re stepping back to look at different ways to deliver services, and we need to transform the healthcare system to make it more efficient,” said the governor who indicated he’s already had conversations with Secretary of Health and Human Services Kathleen Sebelius and Donald Berwick, administrator of the Centers for Medicare and Medicaid Services, to obtain federal waivers. “Instead of doing more in the hope that the economy will come back, we need to do more with less.”
He emphasized that point, referring to the dual and triple eligible Medicaid population – 59,000 low-income seniors and younger people with disabilities – who absorbed 40 percent of the Medicaid budget yet only represented 17 percent of the total Medicaid enrollment during 2007. Of the dollars spent, 73% represented long-term care services.
The governor recommended that all of the healthcare services for this population -- physical health, oral health, mental health and long-term care – come under a single umbrella by July 1, 2012. In earlier remarks, he mentioned that the Medicaid managed care plans have such authority.
“The idea is to focus on that population, set up a framework so we can begin to roll in these services and create incentives and pathways to integration,” the governor told the board.
As a starting point, he’s called for the creation of a Health Systems Transformation Committee, which will represent stakeholders, providers and consumers.
Capitation payments and global budgets will be set, with the goal of achieving best practices and provider incentives for prevention, while looking at unsustainable growth in healthcare costs. That group will consider payment reform, implementation of a value-based benefit plan and create a framework for local accountability.
“This is something the transformation work group will dig its arms around and begin working immediately with a challenging time frame and some level of detail,” the governor said. “Politically, if we want to reduce poverty and social dependence, there are a set of investments we can make on the front end. I’m very excited about this and would like to come back here a year from now and congratulate you on what we’ve been able to accomplish.”
Kitzhaber also mentioned creating a regional delivery system. That could lead to the consolidation of some Medicaid managed care plans, particularly those in rural communities. However he offered no specifics.
“We have literally a short window of time,” he said, mentioning that medical costs are estimated to absorb 16% of the state’s general fund and are rising two or three times faster than inflation. “Medicare and Medicaid costs are driving up the national debt. We have to do something, and Oregon can become the architect for the nation.”
The governor also reiterated that the current budget -- $5.7 billion – isn’t achievable over the next two years since the state will only have $5.4 billion at its disposal. To maintain the current service level, he said, another $1.2 billion would be needed, which isn’t possible, he said
This biennium Oregon has been able to capitalize on federal stimulus dollars and tobacco taxes, giving the state an additional $1.3 billion, the majority of which was spent on the Oregon Health Plan and caseload growth.
“Time is of the essence, and we don’t have time to continue the status quo because of the budget crisis. Otherwise, we’ll face even deeper cuts.”
Over the long term, the purchasing power of the Oregon Health Plan, state employees (the Public Employees Benefit Board) and school district employees (Oregon Educators Benefit Board) could be combined, he said, which would not only influence the delivery of healthcare but also impact the overall reimbursement system. Together these three groups represent 850,000 Oregonians, with Medicaid absorbing close to 600,000 lives.
“For the provider it doesn’t make sense to operate multiple systems,” said Eric Parsons, who chairs the Health Policy Board, and is also the board chair of StanCorp Financial Group, Inc. and Standard Insurance Company. “We need to be able to cooperate to make it more beneficial and look at where the influence and relationships are to move from a discussion to managing the lives of PEBB and OEBB and the health insurance exchange to others in the business community.”
Currently the Oregon Health Plan is the insurer for 15% of all Oregonians and 38% of all Oregon children. Since 2007, 40% of Oregon’s births have been covered by the health plan.
During fiscal year 2010, 37% of Medicaid’s spending was on long-term care compared to a national figure of 34%
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What great incentive is there to move from the Oregon Health Plan. We need to have people be able to earn back some of their benefits rather than having them try to stay under the threshold. I see full time tax supported students having additional children on the Oregon Health Plan. As far as I am concerned it is irresponsible to support people making these bad choices. Family planning should be required for all those on other government benefits. Certainly mandatory government service could be a condition of benefits.
All this is about the funding mechanisms. Delivery of healthcare is about how care reaches the end user. I.e., how the doc and member get together, the efficiency and effectiveness of that interaction, and should include a discussion about how the patient fees are built.
Hospitals manipulate patient stays based on insurance or medicare patient limits rather than getting the patient out as soon as possible to alternate care or health. Doctors know very little about helping people lose weight, and they order tests that are not needed to make sure they covered themselves just in case. They have been known to run expensive meds through their own clinic pharmacies in order to double or triple the billed costs.
These sorts of things are driving costs, as opposed to insurance company cost structures. When is the healthcare system really going to be focused on? !
There may be more leverage gained by addressing how to appropriately reduce the enrollment of the Oregon Health Plan as contrasted to managing more efficiently which is right up there with the overworked theoretical savings to be gained by eliminating fraud and abuse.