Representative Dennis Richardson: The big health care bill HB 2009

Oregon’s 21st Century Health Care System —
HB 2009-C and the Oregon Health Authority
By State Representative Dennis Richardson,

Oregon’s health care system will be overhauled dramatically under the provisions of House Bill 2009-C. The ultimate goal of HB 2009 is for Oregon to create a public-private health care partnership that will provide universal access to quality health care for all Oregonians at a price that is affordable and sustainable. As many of Oregon’s sister-states have already learned, obtaining high quality, affordable and sustainable health care is easier said than done. Now with HB 2009-C, it’s Oregon’s turn at bat.

By way of background, HB 2009-C is the culmination of health care reform work over the past four years. From 2005 to 2006 Senator Alan Bates and Senator (now State Treasurer) Ben Westlund held multiple interim health committee meetings that lead to Senate Bill 329 in the 2007 Legislative Session. SB 329 created the Oregon Health Fund Board. During the interim, the Oregon Health Fund Board held many meetings around the state that resulted in detailed recommendations for Oregon health care reform. Using the Board’s recommendations, State Representative Mitch Greenlick (D-Portland), has crafted and guided through this present session, House Bill 2009-C. To emphasize how complicated the path has been, the final draft of HB 2009-C contains the “dash eighty-six” (-86) amendments. This means 86 separate amendments were drafted for possible consideration sometime since the beginning of this session, a few months ago.

HB 2009-C is also voluminous (613 pages). It creates 15 new bureaucracies– boards, commissions, committees, councils and cooperatives–that will supervise and administer 24 programs, funds, accounts, databases and services.

HB 2009-C is broad-based health care reform, and is certain to have both upside potential and downside risks. I will attempt to provide both sides of the debate on HB 2009-C.

The upside potential of HB 2009-C includes the following goals:

1. Create a new state health department, the “Oregon Health Authority” (OHA). The OHA will centralize and administer all state programs relating to public health, physical and mental health, and alcohol and drug addiction services. The OHA will assume responsibilities for all medical services currently located in the Dept. of Corrections (DOC), Dept. of Human Services (DHS), Dept. of Consumer and Business Services (DCBS), and Dept. of Administrative Services (DAS). By placing all Oregon health-related programs into the OHA, when fully implemented, the Department of Human Services will be focused on its two remaining divisions–Children, Adults and Families (CAF) and Seniors and People with Disabilities (SPD).

2. Improve the quality of Oregon health care. By utilizing assessment tools to evaluate and implement evidence-based health care practices, increasing transparency in rate setting practices for insurance companies and hospitals, and developing common standards for use of expensive medical technological and drugs, the OHA intends to improve Oregon’s health outcomes.

3. Develop patient-centered “health care” delivery systems. The OHA hopes to make health insurance more affordable for low-income-earning workers by developing one or more state health insurance plans that will offer health insurance to individuals and small groups. In addition, HB 2009-C encourages implementation of a “primary care home” model that focuses on maintaining health and controlling chronic conditions, instead of the current “sick care” model that ignores healthful living and disease management, and focuses on diagnosing and treating the diseased and the dying.

4. Lower health care costs. The OHA hopes to save millions of Oregon health care dollars by (a.) consolidating the purchase of health care benefits, (b.) implementing statewide electronic health record and prescription databases, and (c.) promoting greater transparency of health insurance costs, hospital charges, etc.,

5. Promote proactive end-of-life care decisions. A statewide Physician Orders for Life Sustaining Treatment (POLST) Registry will be developed to ensure end-of-life wishes of terminally-ill seniors and patients are accurately communicated to emergency response providers. Far too many terminal patients, who would prefer to die at home, are rushed to the hospital where they are poked, prodded, and stripped of their dignity and privacy, only to expire in the glaring surroundings of an expensive hospital. Although the death may be inevitable, the desire to peacefully pass away at home surrounded by loved ones often is forgotten when death is imminent and 911 is called. A family’s control over their loved one’s final process of dying is then lost. The death occurs in unfamiliar surroundings, and the family is left, stunned by their loss, and burdened with unexpected, estate-breaking medical expenses. Such unfortunate and expensive situations can be avoided by completing a POLST form with the dying patient’s desires to stay at home and pass-away in peace. (For more information on POLST forms and proper planning, click here.) HB 2009-C’s POLST Registry will be a valuable instrument for end-of-life planning and for emergency responders to have access to a terminal patient’s end-of-life wishes.

Those are the upside potentials for HB 2009-C. But, there are other considerations. The downside potential of HB 2009-C includes the following risks:

1. Health care reforms will cost a fortune. Section 9 of HB 2009-C instructs the governing board of the OHA in sub-paragraph (b.) to “develop and submit a plan to the Legislative Assembly by December 31, 2010, to provide and fund access to affordable, quality health care for all Oregonians by 2015.” It goes on to instruct the board in sub-paragraph (c.) to “develop a program to provide health insurance premium assistance to all low and moderate income individuals who are legal residents of Oregon.” (Underlining added for emphasis.)
Oregon has more than 500,000 uninsured legal residents. To “provide and fund” “quality” health care for them would cost between $2-4 billion per year, for starters. Factor in the costs of providing additional doctors, nurses, hospitals, etc. to give health care service to an additional ½ million patients, and you are talking about real money. In addition, sub-paragraph (c.) states OHA’s governing board is to “provide health insurance premium assistance to”¦moderate income individuals”¦.” In past committees, supporters of HB 2009-C have expressed support for subsidized health care for those earning 300% or even 350% of the Federal Poverty Level (FPL).

To see the 2009 FPL chart, click here. From the FPL chart you can see that at 250% of the federal poverty level, a family with three children could be earning $64,475 and still qualify for taxpayer subsidized health care under HB 2009-C’s “moderate income” instruction. If moderate were defined as 300% FPL, that same family could be earning more than $77,000 and still qualify for taxpayer subsidies.

To me there is something wrong when those who qualify for subsidized benefits can be earning more than the taxpayers who pay for them. While I feel strongly that society has a duty to care for those who cannot care for themselves, we do a grave disservice to both the taxpayers and the recipients when the government assumes responsibility to provide health care or other benefits that individuals can and should provide for themselves. Besides, as the FPL goes up, so does the number of those eligible to receive the health care benefits. When the government provides health care, the costs do not go away, they merely get shifted for taxpayers to pay. To be successful, any health care reform must be financially sustainable, and it must be politically acceptable to 51% of the voters””because of the provisions of Section 9 (b.) and (c.), I believe HB 2009-C fails on both counts.

2. Creates the Oregon Health Czar. The Director of the Oregon Health Authority is given extensive powers to regulate the health insurance industry. In addition, Section 26 of HB 2009-C specifically exempts activities of insurers working under the direction of the OHA or DCBS from Oregon laws precluding conspiracies, monopolies, and price fixing. Such laws were implemented to protect citizens from abuse. That abuse can come from government agencies, just as it can come from corporate rogues. Exempting insurers from those safeguards merely because they are working under the OHA can have significant negative, unintended consequences.

3. Oregon Health Authority has a substantial conflict of interest. The OHA is a key regulator in Oregon’s health insurance industry. Section 10 (h.) of HB 2009-C states the following: “In consultation with the Director of the Department of Consumer and Business Services, [OHA shall] periodically review and recommend standards and methodologies to the Legislative Assembly for: (A) Review of administrative expenses of health insurers; (B) Approval of rates; and (C) Enforcement of rating rules adopted by the Department of Consumer and Business Services;” Then, in Section 10 (k.) it goes on to state: “[OHA shall] develop, in consultation with the Department of Consumer and Business Services and the Health Insurance Reform Advisory Committee, one or more products designed to provide more affordable options for the small group market.

Thus, OHA and DCBS will work together in reviewing rate approvals of private health insurers. Unless there are rules implemented to insulate OHA from access to private insurers’ data relating to administration, rating and profitability, a grossly unfair competitive advantage will exist. Not only will OHA purchase, administer and manage all Oregon health insurance plans for employees, prisoners and vulnerable citizens, OHA will also be developing and marketing its own policy or policies of health insurance benefits. This will place OHA in direct competition with the private sector insurance companies that it helps regulate.

4. OHA will force private insurers to either quit or become surrogates of the state. HB 2009-C gives the OHA tremendous power to control, intervene and regulate private health insurance companies. OHA can control private insurers’ rates, while OHA markets its own health plans in direct competition for market share. Such a “stacked deck” against private insurers will likely result in one of the two following scenarios.
(1.) The private insurers will be forced by either unfair competition or excessive regulation to abandon the Oregon health insurance market. The OHA health plans would then be the last game in town. In that event, Oregon will have government health insurance by default.
2.) The private insurers will adjust operations to financial realities, redesign health benefit plans, rates and underwriting to OHA’s dictated requirements. The private insurers will accept the profit margins OHA allows, and, essentially, become subservient to the state health care system. In that event Oregon will have government health insurance through its private insurer surrogates.

Either way, the free market for health care disappears, and state health care bureaucracy fills the void.

5. The federal government is likely to preempt state health care reforms. Notwithstanding the above arguments in favor or against HB 2009-C, on June 4, 2009, President Obama released the President’s own version of government health care reform, on a national level. The President calls for everyone to be insured, either with a policy of their own choice or government coverage. His plan would require the estimated 50 million Americans (including uninsured Oregonians), to receive health coverage. The price tag is about $1.5 Trillion, to start. Criticism of the President’s plan also applies to HB 2009-C. If the government creates its own plan and has the power to give it an artificially low price, it will effectively and quickly drive the private insurers out of the market. With competition gone, America and Oregon will have government run health care whether the citizens wanted it or not.

In conclusion, HB 2009-C is not yet law. It will be debated in the House and Senate on June 8th or 9th. If it passes and is signed into law, it will cost the taxpayers $6.1 million over the next two years. When the Legislature reconvenes for the 2011 session, if the federal government has not preempted health care with a national health plan, the ground work will be laid for full implementation of the OHA. We all will be interested in seeing how much it will cost for the government to provide universal access to health care for all Oregonians by 2015. Even more interesting will be the discussion of how that cost will be paid. As mentioned above, I believe HB 2009-C will cost too much, will drive private insurers out of the market and will leave Oregonians with an unwanted, unsustainable and ill-conceived government run health care system. For these reasons, I voted against HB 2009-C in two Ways and Means committees and I will vote against it on the Floor of the House. Since my position in the current session is often over-ridden by the majority, I expect HB 2009-C to be passed and become law. I have shared with you my opinions on the upside potential and downside risks of HB 2009-C. Time will tell whether my hopes for its potential or my concerns over its risks were correct.
Sincerely,

Dennis Richardson
State Representative