Panel Says PhRMA, Hospital Prices Worse Than Budget Woes

Oregon currently depends more on federal funding for healthcare than all but four other states. “Our world might be upended,” Greg Van Pelt, president of the Oregon Health Leadership Council, suggested at an Oregon Health Forum breakfast earlier this week on the future of coordinated care organizations.

Oregon faces a $1.6 billion budget deficit, and what Van Pelt called “a complete unknown at the federal level.” Taken together, the future of Oregon’s CCOs might look bleak, with the possibility of 360,000 Oregonians who gained coverage with the expansion of Medicaid facing the loss of coverage. But panelists representing CCOs, the Oregon Health Authority and private business see price controls as one possible path forward.

“There’s plenty of money for healthcare in this state. It’s just a matter of redistribution,” said Jeff Heatherington, president and CEO of FamilyCare Health, one of 16 Oregon CCOs formed in the wake of the Affordable Care Act.

Heatherington says “drug companies are the poster children for greed” noting that even generic drug prices have been rising 18 percent for the past three years. OHA director Lynne Saxton agreed, saying “PhRMA costs are more than the elephant in the room. They are the hippopotamus and the rhinoceros.”

Hospital costs too have risen four percent a year, Heatherington said.

Gayle Evans, chief human resources officer for Unitus Community Credit Union, sees hospital charity care declining due to the expansion of Medicaid but “we still see double-digit increases” for employers paying to insure their workers.

Saxton, fresh from making the case for CCOs in the nation’s capital, says “DC is on a different clock now” requiring data from Oregon on an “instant basis” to help the decision makers. “We need to be on board for instant turnaround,” she said, “in a more complicated federal environment.”

In response to a question about a bill sponsored by Rep. Mitch Greenlick (D-Portland) to require all the CCOs to adopt a nonprofit structure, appoint more public members to their boards, make their board meetings public, and set up reserve accounts for excess revenue, Saxton expressed respect for Greenlick personally but less enthusiasm for the bill.

“We need CCOs to deliver results on the money we pay them,” said Saxton, who said the Health Policy Board took a more foundational approach rather than endorsing Greenlick’s bill.

Centene Corporation, which purchased Trillium Community Health Plan, the CCO in Eugene, last year, has come under criticism because it’s a for-profit entity based out of state. Responding to concerns, Chris Ellertson, CEO, said it’s more important to focus on patient outcomes rather than the attributes of a health plan. He also leads Health Net of Oregon.

Nonprofit status alone does not stop organizations from having fleets of corporate jets and excessive executive pay, commented Eric Hunter, president and CEO of CareOregon who chairs the board of HealthShare of Oregon, the state’s largest CCO.

If Hunter were a healthcare czar, what would he do? “Decouple healthcare from employment,” Hunter said. “I think healthcare is a right. I think there is some basic level of coverage (that should be) available by virtue of being an American.”

Asked the same question, both Saxton and Heatherington would mandate an evidence-based prioritized list and control prices charged by hospitals and pharmaceutical companies.

Jan can be reached at [email protected].

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