The Oregon Health Authority has been undergoing significant restructuring on the watch of Director Lynne Saxton, forcing some painful decisions about personnel, and creating anxiety for health advocates -- but as disruptive as these changes may feel now, they’re likely to feel minor compared to the difficult budgetary situation the state faces on the road ahead.
The agency has a big challenge looming on the horizon -- the federal government will begin rolling back its commitment to the Medicaid program in 2017 and 2018, and Oregon will be required to pitch in 5 to 6 percent of the cost to provide healthcare for its low-income residents. Oregon’s share could average $250 million a year in the next two-year budget according to agency estimates, which Saxton deemed conservative.
“There are people who rely on us every day to be good stewards,” Saxton told a crowd of healthcare advocates gathered last week at the state office building in Portland to allay concerns. “We wanted to have our house in order.”
The health authority cut 29 mid-level managerial positions after a legislative review found the agency was too management-heavy and ordered it to trim staff. All but five of those positions could be reduced through attrition, but there were layoffs, including some state employees whom advocates had come to rely on.
HIV activists have been particularly upset at the loss of the state’s full-time HIV Care Assist manager, Victor Fox, whom they say was instrumental in allowing Oregon to offer one of the most progressive HIV drug programs in the country.
“Our plan is to continue services,” said Veda Latin, a manager in the Public Health Division. “We do not plan to end anything.”
Still, Tyler TerMeer, the executive director of the Cascade AIDS Project, worried that Oregon’s move to shift CareAssist management on to Public Health Division employees with other responsibilities would reduce the program’s focus and signal to other states that they don’t need an HIV programs manager, either, just as support for the federal Ryan White program may be fading in Congress.
“It’s about the position. It’s about having someone who’s sole responsibility is to be on it,” TerMeer said. “The decision here doesn’t just impact Oregon, it impacts other states.”
Addictions and Mental Health Gone
In addition to the management cuts, Saxton went ahead with an agency restructuring first initiated by her predecessor, Dr. Bruce Goldberg, as far back as 2013. Two familiar agency divisions -- Medical Assistance Programs and Addictions and Mental Health -- have gone away, to be replaced by the wonkishly titled “Health Systems Division.”
The goal of that move is to mirror the stated goal of the coordinated care organizations, where mental healthcare services are blended seamlessly into other healthcare services a client may need.
Saxton said the CCOs struggles to integrate physical and behavioral health could become an opportunity to fill, in part, the coming budget needs, and ask the federal government for more financial assistance for the Oregon Health Plan transformation.
The state has made significant progress reducing emergency room overutilization and shepherding chronic patients into more appropriate venues for their healthcare needs, but for the CCO experiment to work, the state could argue it needs more time and assistance to figure out the behavioral health puzzle.
The $500 million the state needs for the next budget also assumes that Oregon Health Plan membership levels remain flat at 1.1 million to 1.2 million people. But Saxton said that when the new information technology system comes online this November, it will likely find duplicate members. The state will also have a more responsive means of ensuring eligibility by using the KentuckyOne Eligibility system.
As the economy improves, incomes will also rise, making fewer Oregonians available for free healthcare. If the membership falls, the amount the state needs to contribute to the program will also fall.
Greenlick Calls for Broad View
Rep. Mitch Greenlick, D-Portland, pushed back on a discussion focused too narrowly on the state’s increased cost, noting that the high Medicaid enrollment has allowed billions of federal dollars to pass into the local healthcare industry, creating jobs that the state would not have otherwise, which will be true even if the federal government only pays 93 to 95 percent of the cost in the next state budget.
“I think it’s very important that we don’t reduce the money going to OHA,” Greenlick said. “The idea that we need to limit people on Medicaid is the wrong idea. … Those federal dollars are going to doctors and nurses and hospitals. We need to maximize the federal money that we can get.”
The money also eliminates most of the uncompensated care at Oregon hospitals and reduces costs for providing other services the state had offered, such as mental health care, since Medicaid will now pick up the tab for people who had been uninsured.
A 2013 study by Oregon Health & Science University health economist Peter Graven found that state coffers would increase $350 million from taxes on increased economic activity over seven years through 2020, thanks to the expansion. Despite increased state spending in the last four years of that timeline, the state treasury would gain a net $79 million over that same time period, he wrote.
It was left unmentioned, but one painless means of coming up with the state’s share of the Medicaid expansion in the next budget may be an old gimmick that the state has long used to leverage federal dollars for the program -- increasing the hospital self-assessment tax. The tax is popular among hospitals because they routinely receive more money to provide care than they pay into the fund.
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