Transformation Team Takes Draft Bill to Task

Oregon Health Authority and Governor’s office drafted a document to guide lawmakers, but some say it leaves crucial issues unaddressed
March 3, 2011--The Oregon Health Authority and leaders from Governor John Kitzhaber’s office have distilled a month’s worth of high-level conversations on healthcare transformation into a legislative concept intended to guide lawmakers taking on health reform.
But while the document presented at Wednesday’s Health System Transformation Team meeting was the first tangible draft to come out of the group’s lengthy meetings, some members raised questions about what the concept did not address, including current budget realities.
“We’re going to be cutting 19 percent from Medicaid no matter what,” said Rep. Mitch Greenlick (D-Portland), referring to the reductions called for in the Governor’s Balanced Budget. “We need to start with the assumption that money won’t be there.”
A 12-page, heavily marked-up document prepared by Health Authority staff and Mike Bonetto, the governor’s health policy advisor, spelled out the fundamentals of what could become Oregon’s revamped healthcare system. Among them:
  • The Oregon Accountable Health Care and Services System … should pay for quality while managing within a global budget. 
  • Restructured payments and incentives should reward comprehensive care coordination in new delivery models such as person-centered primary care homes. 
  • All healthcare and services are coordinated, including physical health, mental health, addictions treatment, oral health, home and community-based services, and long-term care services and support.
  • High quality information is collected and used to measure health outcomes, quality, costs, and clinical health information.
Taken together, these directives amount to an ambitious overhaul of Oregon’s current healthcare system. It requires coordination between the Health Authority and the Department of Human Services to promote sharing of information between healthcare professionals, and it allows the state to apply for federal waivers to make it all possible.
Bonetto told the Transformation Team the draft came from recommendations outlined in December 2010 by the Oregon Health Policy Board, as well as the team’s own discussions in recent weeks.
The team has until March 23 to refine the legislative concept. The legislature will take up the bill later this spring, while OHA staff and stakehohlders will work on federal waiver applications over the summer.
One thing the concept does not do, Bonetto stressed, is create a new statewide entity that would single-handedly manage healthcare.
The “accountable care organizations,” or ACOs, mentioned in the document are envisioned as regional entities that work with community partners to integrate public health into the care they provide.
Some noted that the concept didn’t address potentially contentious issues such as cost management or payments to hospitals.
“Where’s anything related to cost management?” asked Eileen Brady, a member of the Oregon Health Policy Board and co-owner of New Seasons Market.
“Our [payment] system is sustaining hospitals,“ Sen. Laurie Monnes Anderson (D-Gresham) added. “Hospitals will have to be flexible enough to realize that the revenue going into their system won’t be as much; how will they react?”
Bonetto said that he and Health Authority staff were being cautious.
The proposed Medicaid cuts for the 2011-13 biennium loom large for legislators.
If the team doesn’t address the cuts, said Sen. Alan Bates (D-Ashland), it could see the “Collapse of Oregon’s managed care organizations.They can’t withstand 20 percent cuts over a two-year period.”
Doctors will flee the system, added Bates, leaving a void in the organizations that “are going to become our future ACOs.” He considered revisiting the hospital provider tax and obtaining a federal waiver for cutting Medicaid enrollment as options for cost reductions, but warned, “Those are bad options.”
Instead, said Greenlick, the team should face the issue head-on while also looking to other states for innovative, “population-based models that work.
“This is ‘Butch Cassidy and the Sundance Kid,’” said Greenlick. “We are jumping off a cliff.”


Prior coverage of the Health System Transformation Team in The Lund Report here.
Draft legislative concept here.
Oregon’s Action Plan for Health, based on recommendations from the Oregon Health Policy Board:



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Really a shame to see Oregon construct its own straight jacket. Policy engineers should consider monetizing the costs of all Medicaid benefits on a percapita basis, envision funding individual accounts with that money and then examining what could be purchased for individual insurance policies. Maybe a vision of fixed cost primary care treatment centers operating in conjunction with more catastrophic insurance products. Medicaid population is mainstreamed with the rest of us; no more public cost shifting as providers would be paid the same as they would by my private insurer. The poor should not be isolated into their own class and economics. Pretty easy to see a conceptual solution if the process can deliberate outside the box.

Cannot see where ACO's are going to save money. Seems like another layer of bureaucracy that will have an enormous task of monitoring treatment and outcomes, payments etc. Seems like the medical home will address the issues of patients falling through the cracks and keeping costs down without having to monitor every patient provider encounter. It is mostly the the patients with poor medical literacy that need tracking, close f/u etc. Medicare for all with 3% admin. burden, could easily convert everyone to this system without radically changes to the current delivery system and then start to make cost savings within this system. Don't understand why we have to completely reinvent the wheel?