A Health Clinic by Another Name…

Will the Oregon Health Plan “Transformation” Work?

By Douglas A. Perednia, M.D.

Here’s a question for you. If you quietly take thousands of Oregonians hostage and then release them with great fanfare, does that make you a kidnapper or a hero? The answer, of course, depends on whether anyone remembers you kidnapped them in the first place. This happens to be exactly the scenario posed by the Oregon Health Plan’s newest innovation, the “Coordinated Care Organization,” or CCO.

CCOs are in the news because they now appear to be the state’s only strategy for saving the Oregon Health Plan (OHP). According to a recent article in The Oregonian, they are “poised to transform” health care. The CCO approach is said to “offer a glimpse of the future for the Oregon Health Plan’s 600,000 low-income and disabled people on Medicaid and Medicare.” As described in the article,

“The state budget assumes the transformed health plan will be up and running next summer—quickly enough to save $249 million in Medicaid costs in the second year of the 2011-13 biennium. If it doesn’t, the state will have to find money to fill the hole or cut Medicaid payments, already down 11 percent this year.”

Before we get too carried away with praising the solution, it’s worth recalling just how we got into this situation, who got us here, and exactly what, if anything, is “new” about CCOs.

It’s no secret that Medicaid in Oregon has been underfunded for decades. As documented by The Lund Report, depending on the contract, “…something like 60% or less of a doctor’s overhead is covered…,” and “an additional 19% cut on top of that is going to create problems with access.” Already, “[r]oughly a quarter of all primary care physicians in Oregon, and about 18% overall, refuse to accept additional Medicaid patients mainly due to low reimbursements….”

One predictable result is that large numbers of OHP patients headed to hospital emergency rooms for care. Indeed, the Oregonian article began by profiling one such patient who is now a CCO patient and advisor to the Governor’s CCO program:

“Wracked by diabetes, hypertension, asthma, spinal disease, allergies, depression and other ills, Amy Anderson felt she was near death when she found the Mid-County Health Center in 2007.

“She had lost her job and health care a year earlier and had been getting most of her health care in hospital emergency rooms. But at Mid-County in Southeast Portland, she was assigned her own team of health care providers that she saw at every visit. They got to know her; she grew comfortable with them.

“‘Any time I called, someone was there,’ says Anderson, 56. ‘I started to believe I was going to get good care.’”

That’s great, but how does the CCO do it? And what is a CCO anyway?

In basic terms, CCO is a medical clinic that has enough people, and a big enough budget, to do what any medical clinic would do if it could afford to do so: take care of its patients. Here is the Oregonian’s description:

“Each Mid-County clinic team has a doctor and family nurse practitioner, each with a clinical medical assistant; a registered nurse; a team clerical assistant; and a third clinical medical assistant to track appointments, preventative measures, prescriptions and other information for team patients.

“The team also has access to psychiatric nurse practitioners and social workers at the clinic. Team members work together in the same room and huddle twice a day….

“When a patient like Anderson shows up, the team knows her health history, her medicines she’s taking and what tests she needs. Sometimes the team will call her in for a test. She can call the team directly and often, if needed, get in to see someone on the same day.”

Doctors normally do most or all of those things for their private patients. So why don’t all doctors do this for their Medicaid patients? The answer, of course, is that they can’t. Medicaid doesn’t pay them enough to cover their basic overhead, let alone retain whole teams of social workers and administrative personnel. If it did, many doctors wouldn’t have stopped seeing Medicaid patients in the first place. Moreover, Medicaid doesn’t pay them for many of these activities (such as coordinating with other providers), at all. Adding insult to injury, Medicaid is notorious for its paperwork, administrative rules and reporting requirements. It’s not our health care providers who have failed these patients; it’s the insurance system that the government itself created.

All of which brings us back to the promised OHP transformation. Since the Oregon Health Plan’s own policies created the problem of underinsured patients who receive all of their care in emergency rooms, why should anyone expect that its new Coordinated Care Organizations will be any more successful?

It all comes down to money. CCOs are nothing particularly innovative or revolutionary. They’re just clinics with more resources than the typical clinic that accepts Medicaid patients. If the additional funding isn’t there, they will be held hostage to the same unsustainable business model that has characterized the OHP in the past.

In that event, Oregonians would do well to recall who got us into this mess in the first place.


Douglas A. Perednia, M.D. is a Portland-area physician and the author of Overhauling America’s Healthcare Machine – Stop the Bleeding and Save Trillions (Financial Times Press, 2011). He blogs at The Road to Hellth.

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  • FreddyFreeloader

    The OHP may just be what I need as I don’t want to pay for my own health care.
    I need my money for drugs, food, shelter, my car, gas, etc.
    Health care is a right and I demand that you pay for it.
    And you will.
    One way or the other.
    Thanks in advance.

    • 3H

      So.. if Health Care isn’t a right — then dying in the street ’cause we don’t care about our own people is?   Funny country if that is true.

  • Rupert in Springfield

    So the problem of people going to ER’s as their primary care is not all due entirely to them not having insurance because I am too mean to pay for other peoples bad habits? It’s also due to government health insurance itself?

    This is now officially ridiculous.

    Let’s get back to the original OHP ideal. Make a list of every known procedure or treatment. Cover the cost of those we can. If too many people seek care and we can’t cover those procedures and treatment, start cutting those off the bottom of the list until we can. If the Federal government has an issue with this, simply ignore it, just like we do with medical marijuana, immigration etc. etc. etc.

    • Anonymous

      Everyone else is paying for your bad habits, Rupert, through tax deductions given to you or your employer for purchasing health insurance. 

    • valley person

      So the ones at the bottom die? Would that be cheered at the next Republican debate? 

    • 3H

      If you buy insurance, you already pay for their bad habits.  And, in fact, they pay for yours.  If everyone lived a simple, healthy, life-style, your rates, and mine, would probably be significantly lower.

      The fact is that many who go to the ER simply have bad luck.  They’re not there because their habits are any worse than yours or mine.   They’re there because they are sick.  What should the do?  Stay home?  Not take their child in?   

      What happens when we start cutting procedures that are life saving?  Or we cut procedures that would prevent an illness form getting worse (once it gets worse, then then go in for a more expensive life-saving procedure)?

  • 3H

    So what is the solution?  If we start paying doctors more so that they will be more willing to to take Medicaid patients, then that will either greatly increase the budget or mean fewer people are covered.

    And let’s not put all the blame on OHP.  They are not responsible for skyrocketing health care costs.   

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