OSPIRG Gives Key Reform Bill Mixed Review

The group's lobbyist says Oregon’s cost containment bill mostly succeeds, but falls short in holding industry accountable

May 28, 2009 -- House Bill 2009 includes important steps forward in some key areas of health care costs and quality. In other areas, the bill falls short of what’s needed to address the problem of rising health insurance and out-of-pocket costs  facing families and businesses.

The bill includes sensible strategies to begin identifying and cutting waste in the health system in ways that improve care. Steps forward include provisions to:

  • Cut red tape by replacing the myriad versions of claims and billing forms with one common electronic form, and encouraging adoption of effective health information technology;
  • Use the best practices in medicine, making sure that doctors and patients know of the latest, most effective therapies for their conditions;
  • Improve health care cost transparency through an all-payer, all-claims database;
  • Establish the Oregon Health Authority with the duty to contain costs, improve quality and expand access;
  • Direct the Authority to develop a health insurance exchange, including the potential for the choice of a public plan.

But HB 2009 will fall short when it comes to standing up to insurers' and hospitals’ high prices squeezing families and businesses trying to hang on to coverage.

After years of double-digit health insurance rate hikes, including Regence BlueCross BlueShield's 26 percent rate hike last year, OSPIRG joined with small businesses and consumer advocates to call for significant strengthening of Oregon’s insurance rate review process.

Holding to commercial insurance companies accountable on rising costs proved difficult during a session when a hospital and insurer tax to fund coverage expansion was under negotiation. HB 3145, a bill to strengthen rate review sponsored by Rep. Shields and passed by Rep. Holvey’s Consumer Protection Committee, was traded in exchange for industry neutrality on the tax.

Language giving the Director of Consumer and Business Services more discretion to approve rates was inserted into the amendments to HB 2009, over the objections of advocates and lawmakers arguing the legislature should require – not just allow – more robust rate review.

Moving forward, it’s clear that the rising cost of health care will continue to be a top issue for Oregonians. OSPIRG commends the work of the Oregon Health Fund Board to bring forward the excellent recommendations implemented through HB 2009, and applauds the work of the Legislature to move forward on both coverage expansion and cost containment this session. We are disappointed that Legislature does not appear poised this session to passed bills to hold insurance companies, hospitals and drug companies accountable on costs, and we hope that next session that will be a priority. We look forward to continuing working with Oregon leaders to advocate solutions to cut waste and improve care for all Oregonians.

Laura Etherton is the lobbyist for Oregon Public Interest Research Group. You may contact her here.


OSPIRG is correct about the need for stronger accountability, with respect to pricing decisions, by insurers and hospitals--in this way: Both insurers and hospitals face local "monopoly" issues that counter their efforts to control costs. Hospitals have to deal with their professional staffs, who can move admissions elsewhere if asked to participate in cost management activities that they don't want to be a part of, and insurers face local provider (professional and hospital) monopolies and oligopolies, who can disrupt their commercial networks if not paid enough. A countervailing force is needed in both cases, to provide sufficient reason to pursue needed, appropriate cost management strategies that will allow the hospital or insurer to remain profitable with smaller price increases. More difficult conversations must happen than is the case now, even though these businesses have some already. Transparency, and a countervailing force created by accountability, are both essential to creating needed change.

Does anybody know the metrics of how the success of this gambit is going to be measured? If it does not "work", how is its ill conceived design reversed? What are the leadership names of the people to be held accountable for failure? Do they get fired? Or just bump along as "nice, well meaning people"?