While Oregon’s health system has undergone major changes, a broad array of measures show the state’s health reform strategy has increased health coverage, improved health outcomes and contained health care costs in the state’s Medicaid program, according to a new report. The Oregon Health Authority’s “Oregon’s Health System Transformation Quarterly Legislative Report” also shows that coordinated care organizations (CCOs) – health plans that serve most Oregon Health Plan members and key parts of Oregon’s health reform strategy – are financially stable, with operating margins remaining healthy even as the state has adjusted rates.
“Across the nation, Oregon’s innovative approach to health reform is being watched closely as a model for providing better care, achieving better outcomes and holding down costs,” Oregon Health Authority Director Lynne Saxton said. “We encourage Oregon to review its effort and investment to date as we consider how to proceed on health system transformation into the future.”
Oregon Health Plan grows to more than 1 million members
In 2012, Oregon launched major changes to its health care system. It established 16 CCOs across the state to deliver more-coordinated and flexible care to improve the quality of care, achieve better outcomes and hold down costs for Oregon Health Plan (OHP) members. In addition, Oregon expanded OHP coverage through its implementation of the federal Affordable Care Act (ACA) in 2014.
The report found that OHP’s enrollment has changed dramatically in the past three years:
- Enrollment: Oregon Health Plan supports more than 1 million Oregonians – more than one in four people.
- Increase in adult enrollment: OHP now covers more adults (60 percent) than children (40 percent). Prior to the ACA, OHP covered more children.
- Most OHP members are served through CCOs: Nearly nine out of 10 OHP members are enrolled in a CCO.
Oregon health reform controls costs while maintaining CCO financial health
Through Oregon’s dramatic changes in health reform, the state has held Medicaid costs to a promised 3.4 percent per-capita annual growth rate – saving $1.3 billion in state and federal dollars from 2013 to 2016. Oregon’s growth is below the 4.4 to 5.4 percent Medicaid increase other states are experiencing.
Over the past three years, on average CCOs remained financially healthy. In 2013, the aggregate operating margin for Oregon’s 16 CCOs was 3 percent with a system-wide consolidated margin of $44.6 million. Total margin increased in 2014 to $234.8 million with a consolidated operating margin of over 7 percent, as CCOs experienced a surge in enrollment due to the ACA expansion population. The state based 2014 rates on projected utilization. However, the population turned out to be younger and healthier than expected. In 2015, OHA adjusted the rates paid to CCOs, based on actual OHP member experience data – total consolidated margin for 2015 was $215.3 million with a consolidated operating margin of 5 percent across the 16 CCOs.
Coordinated care organizations (CCOs) currently have contracts that expire at the end of 2018. The Oregon Health Policy Board is in the process of holding listening sessions across the state to discuss the future of Oregon’s CCOs and to gather public input about how they deliver services to Oregon’s most vulnerable citizens.
OHA’s “Oregon’s Health System Transformation Quarterly Legislative Report” also covers: Oregon Health Plan demographics, CCO performance on quality metrics, member satisfaction, health disparities, finance, patient-centered primary care homes, evaluations, local governance, and eligibility and enrollment. You can read the quarterly report on the OHA website at http://www.oregon.gov/oha/analytics/Documents/LegislativeReport_Q1_2016.pdf.
