RAND Corp. Undertakes Analysis of Single-Payer Health System

Proponents applauded the Oregon Health Authority for selecting RAND.

Supporters of a single-payer healthcare system couldn’t be more pleased that the RAND Corporation was chosen to conduct an in-depth study on the most feasible way to achieve universal coverage. Its work should be completed by Nov. 1, in time for legislators to debate the merits when they gather in Salem next February.

Dr. Samuel Metz, member of Oregon Physicians for a National Health Program, applauded the decision. ”I am reassured the Oregon healthcare financing study will be conducted by an organization with experience, competence, and credibility. The Oregon Health Authority made a wise choice. The RAND Corporation has not conducted national or state health care financing studies, but it has, over several decades, performed highly respected studies comparing health insurance deductibles to outcomes. These results have been interpreted and misinterpreted to support or reject consumer directed healthcare plans.”

Earlier this week, the Oregon Health Authority awarded the contract to RAND, one of three competitors, which requested $395,525 to conduct its work. The Public Consulting Group, Inc., also submitted a proposal for $324,000 along with the Wakely Consulting Group for $405,270.

During the 2015 session, House Bill 2828 authorized the OHA to oversee a comprehensive study of healthcare financing in Oregon, one that will look at a number of possible situations, including single payer, a public option on the insurance exchange, and a full rollout of the Affordable Care Act, possibly with a Basic Health Plan for working-class residents.

Sen. Michael Dembrow, D-Portland, a long-time advocate of a single-payer system, fought hard for this study, and his legislation nearly died on the final day of the 2015 session, until Sen. Alan Bates, D-Ashland, changed his vote, “with two broken arms,” and while he’d offer his begrudging support, he highlighted the single-payer aspect of the study and described it as a lost cause.

“I think we’re going to spend $300,000 in this state on something that’s not going to happen,” said Bates, an osteopathic family physician. “I don’t want to spend money on this [study] ever again. Our present healthcare system is barely sustainable and I don’t want to put any more load on it.”

According to an earlier article in The Lund Report, Dembrow never regained the support of Hass or Winters, both of whom supported an unfunded study in 2013, along with Sen. Betsy Johnson, D-Scappoose and three other Republicans, including Sen. Jeff Kruse of Roseburg. All Democrats

and one Republican -- Rep. Andy Olson of Albany -- supported HB 2828 in an earlier House vote.

Now that the study looked to actually be going forward, Johnson suddenly had concerns that it might be tainted by a small amount of private funding from the Northwest Health Foundation that will supplement state resources.

Dembrow highlighted the support of Oregon Health & Science University President Dr. Joe Robertson, the Oregon Public Health Association and the Oregon Medical Association. Aside from examining the expansion of a Medicare-like system -- the single-payer option -- Dembrow hinted that HB 2828 could give the state insights into less revolutionary reform efforts.

“The results of this study could strengthen the existing CCO system,” he said, referring to the coordinated care organizations that manage the Oregon Health Plan for low-income residents. Single-payer advocates have also said they will use the results of the study to serve as the backbone for a ballot measure charging the Oregon Legislature with implementing a universal healthcare system. Measure 91, legalizing recreational marijuana sales, was approved by the voters but carried out by the Legislature, and had a similar implementation structure.

Although Dr. John Kitzhaber, the former Oregon governor, has always taken an ambivalent stance towards single payer, Kruse tied Kitzhaber to HB 2828 like an albatross, now that he no longer supports the study: “Our former governor, who resigned in disgrace, was always a supporter of single payer. … Friends, a move to have the government take control of healthcare is one of the worst things we can do for our citizens.”

Another Republican, Sen. Brian Boquist of McMinnville, was more judicious. He said he did not actually oppose the study, he just thought the Oregon Health Authority was wasting well more than $300,000 in its existing $19.5 billion budget through duplicative programming. “We just need to tell them to go study it,” he said.

The contract calls for researchers to look specifically at four healthcare concepts: single payer, where the government would provide a program for everyone through taxes; a commercial insurance product for all with the essential health benefits of the Affordable Care Act; adding a public option and basic health plan insurance products to the federal exchange for Oregon; and the default, the current system under the Affordable Care Act.

The researchers must look at both costs and savings. They’ll also have to identify a funding mechanism for the first option, a missing component that has stalled a single-payer system in Oregon.

This could be particularly tricky in Oregon since the state has long rejected a sales tax, and additional payroll or income taxes would come on top of the state’s already very high personal income taxes. But Metz said an economist had already sent an idea to Health Care for All Oregon that would provide adequate funding by relying on a capital gains tax.

Besides a complete overhaul, the study could show the path to smaller improvements, such as opening up a public option or coordinated care to more people, which might be accomplished with waivers from the federal government.

“If everything goes well in the procurement from now on the contractor will have five months to complete a very complicated task,” said Rep. Mitch Greenlick, D-Portland. “I will be delighted if anything useful comes out of the study.”

Diane can be reached at diane@thelundreport.org.

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