Opinion: CCO 2.0: Tougher Goals But Same Philosophy For Oregon's Coordinated Care System

Oregon Health Authority building.jpg

We do things our own way in Oregon. Over the years, Oregonians have brought the same innovative approach to health reform as we’ve applied to protecting public beaches and voting by mail. Now, Oregon is launching the next generation of health transformation – what we at the Oregon Health Authority (OHA) lovingly call “CCO 2.0.”

As this effort has unfolded, people have asked me: is OHA still committed to the original vision of health transformation? Is the CCO landscape tilting toward bigger entities at the expense of smaller ones? Why can’t local leaders and providers pick the coordinated care organizations (CCOs) for their communities? Is OHA moving toward a more traditional insurance regulator role, rather than a lead partner in transformation?

Let me be clear: OHA remains committed to the original principles that made Oregon’s health care reforms a national model. Oregon’s 15 locally-governed coordinated care organizations (CCOs) are the cornerstone of our state’s promising (but not perfect) health transformation. The core of the model isn’t changing: CCOs need to collaborate with local partners. They must invest in non-medical, health-related services to address social determinants of health and equity. They’ll receive incentives to hit performance targets tied to better care for OHP members.

Oregon Health Authority Director Patrick Allen/Courtesy State of Oregon
But make no mistake: in CCO 2.0, we’re raising expectations for our CCO partners, and for ourselves at the Health Authority. We need to get better results for Oregon Health Plan (OHP) members, for their communities and for state taxpayers.

Our CCO model is different than Medicaid plans in other states. Most states have hired big insurers as managed care organizations (MCOs) to control costs in their Medicaid programs. But these national corporate giants have done little to fix a fragmented, impersonal and costly health care system.

In contrast, Oregon leaders created CCOs to do more than pay claims and contract with providers. We wanted CCOs to change health care at its core by transforming the way it’s delivered. We bet that better care and better health would lead to lower costs.

For the most part, it’s worked. Unnecessary emergency department use dropped by 50 percent – just one of many measures where CCOs produced positive gains. We’ve held state costs under our Medicaid waiver to a 3.4 percent growth rate. Today, more OHP members say they are healthier.

CCO 1.0 was born out of pragmatic flexibility. State leaders needed CCOs to be successful. They needed CCOs to cover every part of the state. They refused to mandate a single CCO model. The legislation that established CCO 1.0 was intentionally flexible: it allowed CCOs to be non-profits and for-profits. Some CCOs were descendants of former MCOs. Some CCOs were wholly-owned by a local hospital. Some were arms of insurance companies.

And there were trade-offs. At OHA, we gave CCOs breathing room so they could get up and running. The space we gave CCOs in CCO 1.0 means we have more opportunity to hold the system accountable for realizing the full potential of health transformation in CCO 2.0.

So now there’s more work to do. Too many communities suffer unacceptable health disparities. Oregonians need better behavioral health treatment. We can do more to hold costs to a sustainable growth rate.

CCO 2.0 is designed to tackle these challenges. The stakes are higher, so we set the bar higher too.

Gov. Brown established 4 improvement priorities for CCO 2.0: 1) Improve behavioral health; 2) Address social determinants of health and health equity; 3) Increase value and pay for performance and 4) Maintain sustainable cost growth.

Thousands of Oregonians affirmed these priorities in public meetings, online surveys, a survey of OHP members and a 10-city listening tour. The state’s health policy board directed OHA to pursue these goals in new CCO contracts that take effect on January 1, 2020.

Achieving these priorities means the going will get harder than it was in CCO 1.0, for all of us.

In CCO 2.0, we expect CCOs will stay true to the hallmarks of the original CCO vision: Inclusive community governance. Effective investments in housing, food security and other social determinants. Strong partnerships with counties and nonprofits aimed at improving the health of local communities.

And we expect they will meet the CCO 2.0 goals. That’s why we designed a rigorous and objective evaluation process that focused on accelerating transformation, re-wrote the CCO 2.0 contract so we have more tools to hold CCOs accountable for better results, and instituted tough readiness reviews. We put 4 CCOs on 1-year remediation plans to make sure they can up their game to meet the CCO 2.0 standards.

So, let me come back to the anxieties I’ve heard some people voice about CCO 2.0.

  • CCO structure: No, we’re not shrinking the field in favor of a fewer, larger organizations. It turns out when we announced our intent to award new CCO 2.0 contracts, a total of 15 applicants qualified – the same number of CCOs we have today. We continue to have a mix of for-profit and nonprofit entities, with a wide variety of organizational structures.
  • Local partnerships: Yes, CCOs must continue to have deep roots in their communities. While local leaders may prefer one applicant over another, any applicant who can meet OHA’s higher bar for CCO 2.0 will get a contract. Applicants must show they have a network of providers who can serve OHP members and strong local partnerships with counties, housing agencies, schools, human service providers.
  • Financial accountability: Yes, OHA is borrowing the same tools from state insurance regulators use in the commercial market, but we’re not turning CCOs into insurance companies. We don’t want to limit CCO ingenuity, just safeguard their financial stability. No one wants members to risk any unexpected disruption in care.

While the players evolve and maps shift, the core philosophy of the coordinated care system remains unchanged. I look forward to working with stakeholders across the state to achieve the goals of CCO 2.0.

Patrick Allen is the director of the Oregon Health Authority.


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