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Even without a pandemic, health care was wild in 2023

It was a year in which the health care community had hoped to recuperate. Instead, Oregon and southwest Washington saw major changes affecting workers, patients, insurers, state officials and health systems.
Portland, Oregon. | SHUTTERSTOCK
December 21, 2023

Sure, the pandemic ended. But 2023 was a wild year for health care in Oregon and southwest Washington. 

The year’s headlines in The Lund Report featured new developments, policy changes, behind-the-scenes clashes and political shifts that had real effects on real people and will continue to drive change next year. 

No sooner had the year begun than advocates, regulators and physicians began wrestling over the rules around the rollout of the state’s voter-approved psilocybin program, including on microdosing.

But perhaps no other area saw as much turmoil as hospitals and the people who work in them.

Early in the year, coming off the pandemic, hospitals tapped the state for hundreds of state-funded nurses to address staff shortages. But the previous public alerts about reduced quality of care in hospitals fell largely silent, in part due to a little-noticed legal interpretation that allowed facilities to keep their crisis care measures  secret.

Still, fed-up nurses sick of the stress and moral injury caused by inadequate support drove a minimum-staffing law through the Legislature based on a wide-ranging compromise with hospitals — one that led to passage of a law that critics feared would gut the state’s cost-growth controls

One effect of the short-staffing that emerged was predicted early in the pandemic: measurable declines in a key benchmark — Oregonians getting sick as a result of being in health care facilities.

Like nursing homes, hospitals also fell victim to a national trend of health care hacking and ransomware, sparking claims of wage theft.

Despite reporting improvements, hospitals faced increased scrutiny over their charity care practices, including multiple investigations into alleged deceptive debt collection or billing practices affecting low-income people in Oregon and Washington.

Hospitals’ financial losses started to slow in 2023, but leaders at some of them still said they had no choice but to make cuts — often, critics said, at the expense of the communities they serve.

Struggling PeaceHealth moved to close its Eugene hospital, leaving Oregon’s second-largest city and the University of Oregon’s main campus without a nearby emergency room.

Other cuts primarily affected women and families. McKenzie-Willamette in Springfield shed its midwifery unit. Legacy Health moved to close its birth center at Mt. Hood Medical Center, but was denied and reversed course after critics noted it would most hurt diverse, low-income people in east Multnomah County and Clackamas County. The hospital was dinged over safety by the federal government afterward.

In Baker City, U.S. Sen. Ron Wyden and Gov. Tina Kotek joined other officials in responding to local advocates trying to persuade Saint Alphonsus Health to keep its Baker City birth center openThey failed, leaving potential parents contemplating long drives to give birth, or even ambulances or lifeflights in emergencies.

Hospital efforts to shutter unprofitable birth centers came as maternity care has been declining across the country. They also came as the country, and Oregon and Washington, continued to experience upheaval and ripple effects from the U.S. Supreme Court’s decision last year to let states restrict abortion. 

In Oregon, the state braced for an influx of people seeking an abortion even as concern helped drive a push for a state constitutional amendment. Nationally, women are facing new threats to their health and safety due to the decision, and the status of abortion medication is in doubt. 

Finances spark merger ideas

To deal with continuing losses, some hospitals looked for help. Mid-Columbia merged into Adventist Health after promising to maintain reproductive services

And even as many struggled, one hospital system thrived unexpectedly: Oregon Health & Science University. 

There was no shortage of demands for the unexpected funds taken in by the university: raises for nurses, raises for research workers, raises for managers, lengthy litigation over alleged defamation in doctors’ notes and even a hefty payout for delaying the release of public records.

But its surprise success made it an attractive partner for struggling Legacy Health, and two announced a desire to merge.

Hospitals cited their financial situations while demanding improvements to the Oregon behavioral health system and suing the state for what they called the use of their facilities for the forced boarding of people experiencing mental illness.

In Washington state, related litigation helped fuel increased investment.

Workers organize

Meanwhile workers in hospitals around Oregon increasingly organized into unions, with the Providence Health seeing the state’s first nurse strike in decades, causing an “all hands on deck” situation. It was soon followed by others. Legacy Health was perhaps most affected by the union trend, which even included physicians who previously had been reluctant to organize.

Legacy had previously been Oregon’s main health system holdout against union activity, even suing in federal court to block state meal break rules that they said were unlawfully pressuring them to unionize.

Funding shortages also affected ambulance coverage and other services, fueling conflict over emergency services in communities including Washington CountyMorrow County and Multnomah County.

As insurer contracts came up for renewal, health systems such as Oregon Health & Science UniversitySt Charles Health and Providence Health asked for changes, such as to reflect elevated labor costs. But they ran into resistance from insurers, sparking public stalemates and uncertainty for hundreds of thousands of vulnerable seniors in the increasingly controversial Medicare Advantage program, as well as others who suddenly faced potentially losing access to their providers.

Even with insurers trying to hold the line, people in Oregon and Washington saw their premiums go up.

Those premiums are projected to further jump for some people but drop for others as a result of a new state-designed health plan extending free coverage to a portion of the working poor.

Topsy-turvy legislative session

While the nurse staffing measure won approval in the Legislature, Republican efforts to address shortages by lowering barriers to out-of-state nurses went nowhere. Opponents of the interstate nursing compact cited poor regulation in other states, albeit it later surfaced that nurses with questionable certifications were admitted to practice in Oregon before a federal investigation went public.

Local public health officials, meanwhile, complained that cuts in state funding would reverse course on advances during the pandemic, particularly affecting racial disparities and other health inequities.

Insurers were a target on several fronts, including billing practices and coverage mandates.

Lawmakers took up the issue of insurers’ drug company intermediaries that many blame for shuttering independent pharmacies.  After the demise of some efforts to restrict the companies, called pharmacy benefit managers, state auditors issued a report calling for more aggressive action.

Republicans’ walkout over gender-affirming care — for which Oregon has become a destination — put many health policy bills on hold, followed by a final-week surge

Responding to a surge in youth overdoses that followed years of state inaction on prevention and treatment, the Legislature took action and the Oregon congressional delegation pushed for federal changes.

One bill, to set up and fund a state board to frame a plan for universal health care, made it through despite last-minute concerns raised by Gov. Tina Kotek. The state is now staffing it.

However, questions lingered over whether new laws passed by previous legislatures had achieved their goals, such as improved dental care to address gaps in care for people who can't afford pricey dentists or live in rural areas.

Heat and addiction concerns

Summer in Oregon sparked more heat waves and thoughts of climate change, with its effects on health.

And Oregon’s status as the state with one of the biggest addiction problems in the country and one of the worst systems to address it continued.

Overdoses shot up all across Multnomah County, adding to the pressure on first responders even as long-running plans for a new behavioral health facility were essentially scrapped, sparking calls for a new plan.

Behavioral health providers were slammed with new challenges stemming from the popularity of meth and fentanyl, though there was some good news in new facilities springing up to respond.

The state finally launched a long-awaited new respite center program to help people facing mental health challenges, but promptly ran into problems

The mental health problems facing children in particular became so complex and challenging that the state’s top health care advocate called on Kotek to set up a new office to tackle it.

The trend of increased substance-induced psychosis has continued to put pressure on the Oregon State Hospital, which found itself the subject of continued outside findings of poor safety, as well as on local governments who struggled to deal with a federal judge’s order setting limits on treatment in the hospital.

Inside the hospital, efforts to promote healing surfaced in unexpected places.

Despite a huge boost in behavioral health spending authorized by the Oregon Legislature, some providers struggled, including with what they called onerous audits.

The good news? The state has unveiled its portion of the new national 988 crisis support line and hopes to use it as a foundation for reforms.

Meanwhile, programs to tackle addiction and address behavioral health workforce challenges gained traction in an unlikely place — Oregon’s prisons, where the majority of people incarcerated who want treatment never get it.

Drug decriminalization sparks backlash

The  trends in drug use and overdoses sparked growing scrutiny of Measure 110, the voter-approved drug decriminalization law that opened a new spigot for funding of substance use-related services.

The state’s rollout continues to be marked by delays, a failure to track important outcomes, a need for more information to guide spending, and  unexpected headlines.

Promises made during supporters’ campaign that the law would boost treatment services to combat addiction have not panned out as some hoped, with funding primarily going to services other than residential treatment. However, the funding has boosted other community-based services, such to reduce the risk of drug use, increase support by peer mentors, and provide more time for recovery. 

The measure did succeed in proponents’ aim of reducing the use of incarceration as the state’s primary response to substance use and addiction, driving a huge drop in drug-related arrests. But though it was earlier considered unlikely, an effort to recriminalize public drug use is now gathering steam.

New governor staffs up

Kotek spent much of her first year in office getting her bearings on the fly and staffing up, including adding Portland expertise to address the city’s behavioral health issues.

Among her early hires was Ebony Clarke to head behavioral health reforms as well as James Schroeder to take over the leaderless Oregon Health Authority.

Schroeder, however, felt resistance to his efforts to restore collegial relations with the regional care organizations that oversee care to one in four Oregonians, and resigned after seven weeks, privately calling the agency “toxic.”

Fortunately for Kotek, OHSU had loaned her a top lobbyist, Abby Tibbs, for a portion of her pay. The governor deployed her to help run the health authority.

But the agency appeared to founder, observers said, and top managers left, compounding its issues.

Behind the scenes at the health authority, finding a replacement for Schroeder took longer than expected, but Kotek eventually named Sejal Hathi to the job. Despite little experience in government executive positions, she has drawn praise as a physician, public health leader and health policy thinker.

In January, she’ll take over an agency that is not excelling in implementing Measure 110, facing challenges in oversight, and struggling to roll out changes to the state’s Oregon Health Plan that are intended to address underlying causes of poor health, such as housing.  Recently, the agency’s much touted new health benefit to address climate change seemingly all but vaporized.

One bit of good news? Oregon has been among the most successful states in the nation in helping low-income members of the Oregon Health Plan keep their Medicaid-funded coverage despite renewed eligibility checks.

Spotlight on care for people with low incomes

One issue Hathi will inherit is the future of the Oregon Health Plan, in which contractors serving the plan took in large profits during the pandemic, in part due to shutdowns and staff shortages that hurt access to care. That, in turn, sparked Kotek and lawmakers to get involved and led to former Gov. John Kitzhaber and others to call for reforms.

Not only that, but the state still has not made a decision on the proposed merger of the state’s largest care organization in the Oregon Health Plan, CareOregon, with a California nonprofit. Their leaders cite benefits but opposition has grown even as the state has faced complaints of bungling the process.

As the year came to a close, tensions and complaints of poor worker safety in behavioral health and hospitals ran high, propelled by two high-profile killings. Lawmakers have vowed to tackle the situation in hospitals.

Corporate and private equity influence on health care has continued to grow, including in partnership with nonprofits and government health care, sparking concerns.

Meanwhile, the Oregon health care transaction review program that is slated to weigh in on mergers involving CareOregon, Legacy Health and Oregon Health & Science University is itself facing an uncertain future in court.

You can reach Nick Budnick at [email protected] or at @NickBudnick on

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