Massive Expansion of Insured, Slow Growth of Workforce, Monopolies Create Cost Conundrum

Can we harmonize access, quality and the cost of healthcare? That’s the question panelists at Willamette University’s symposium on 21st Century Healthcare tried to answer – with data.

Peter Graven, health economist at OHSU’s Center for Health Systems Effectiveness, presented the latest report showing that, as of July, only 5.6 percent of Oregonians were still uninsured.  “Oregon had the largest increase in Medicaid driving a large decrease in the uninsured,” Graven said.

It’s also a dramatic improvement from Oregon’s past. Before the ACA’s ban on pre-existing condition exclusions, individual mandate to purchase insurance and subsidized coverage, and the expansion of Medicaid, Oregon’s uninsured rate was estimated at 14.5 percent.

The report shows 362,000 Oregonians covered by Medicaid, thanks to successful outreach and Oregon’s fast-track enrollment.

Counties with the lowest uninsured rates also had the greatest Medicaid expansion with Crook, Josephine, and Curry counties showing less than 1 percent uninsured. In comparison, the Portland metro region reported uninsured levels of 8.7 percent in Multnomah, 7.9 percent in Clackamas and 9.3 in Washington counties.

Not surprisingly, as people get insurance, they spend more on care, requiring a larger healthcare workforce in every county. With the time lag involved in hiring -- Graven said it can take a year to hire a doctor -- “everyone is cautiously alarmed.” However, “when dollars are coming in, you can hire.”

Meanwhile, Oregon Healthcare Quality Corporation is conducting a study to be released this fall on behalf of the Robert Wood Johnson Foundation, which is looking at claims data for 3.5 million unique patients captured in claims since 2006. It encompasses more than 600 million medical and pharmacy claims records and 727,000 unique providers rendering services.

“Oregon is one of the few places doing this, and it requires a lot of trust and legal expertise,” said Mylia Christensen, executive director of Q Corp. “We do not intend to use this as ‘gotcha’ data. We intend to use it for better care at lower costs.”

By 2018, Brandie Gasper, senior counsel at Locke Lord LLP in Los Angeles, believes the wholesale insurance market will be moving to a consumer market – with a drive for competition and cost transparency.

Christensen said that engaging consumers is difficult. “What other industry is there where it’s so hard to figure out the quality and the cost?”

Just how competitive is the healthcare market? Graven also presented 2004 statistics showing average hospital and health plan concentrations and took questions about how healthcare prices have been affected with the majority of physicians employed by hospitals and the growing number of hospital mergers. “We don’t know but when concentrations get higher, we get worried about price increases,” Graven said.

In fact, a district judge denied the merger of St. Luke’s Health System and Saltzer Medical Group in Idaho because it would have created “a substantial risk of anticompetitive price increases.”

“To be a hospital, it’s tough to have two that do transplants in a town,” Graven said. Because hospitals tend to be natural monopolies, it might make more sense to break them up or regulate their monopolies.

Oregon currently purchases employee health for 1.3 million people, compared to the state’s population of 3.8 million, which may help create bilateral monopolies. “If payers get stronger, it can balance it out,” Graven said. Jan can be reached at [email protected]

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