Oregon Health Care Reform Begins

Oregon has a health care crisis. When 607,000 Oregonians and 50 million Americans have no coverage for health care emergencies or treatment we have a problem. When uninsured patients, who cannot afford to pay for a doctor visit, go instead to expensive hospital emergency rooms for routine, non-emergent medical care we have an expensive problem. And, when 4% of Oregon workers are losing their health insurance every year because of skyrocketing group insurance premiums, and Oregon families that are insured start spending more money on health insurance premiums than on their monthly home mortgage payments, we have a crisis.

I have recognized this coming health care crisis for several years, and as I mentioned in the November edition of the Oregon Health News this Legislative Session must deal with it. The health care crisis in Oregon is real. This is not a time for partisan squabbling. It is time for the Legislature to accept its duty and opportunity. This Legislature must clearly define the health care problem, research and consider in public hearings the best alternatives for solving the problem, then take necessary legislative action to implement the best alternative, in a way that is reasonable, affordable, sustainable, and acceptable to the majority of Oregon voter.
Last night I attended the Health Care Reform Summit at the Portland Convention Center. All Oregon legislators were invited, along with key business leaders, health industry stakeholders and advocates. The purpose of the event was to ensure at the outset of the 74th Legislative Session that Oregon’s policy makers were fully informed about the health care crisis in Oregon and the need for well-considered, bi-partisan action. Four potential approaches to solving the health care crisis and providing universal access to health care in Oregon were discussed. Each is mentioned below, and all four will get careful consideration by the House and Senate as this legislative session progresses.

The first proposal came from the keynote speaker, Oregon’s past Governor, John Kitzhaber M.D. Gov. Kitzhaber gave an overview of America’s health delivery system. He explained how our health care system was created more than 50 years ago and is no longer sustainable in the 21st century global marketplace. Between $1200-1500 is added to the price of every car and truck built in America to pay for past and present employees’ health care benefits. Such a high health care cost component is a burden carried by U.S. automobile manufacturers that is not carried by Canadian and Japanese competitors. Gov. Kitzhaber stated America’s Medicaid and Medicare systems are based on categories of people and not strictly on financial need. As a result America’s poor are divided into two classes””the Deserving Poor (those who qualify for benefits based on their classification””children, poor pregnant women, seniors age 65+, etc.), and the Undeserving Poor (those who fail to qualify for benefits because their’s is not a favored classification””poor men and women under age 65, etc.). His message was clear: America, with Oregon leading the way, deserves a full examination and reformation of its health care system. Governor Kitzhaber’s proposal is called The Oregon Better Health Act.

The second proposal is Senate Bill 329 and is sponsored by Senators Alan Bates and Ben Westlund. Since the 2005 legislative session, Senators Bates and Westlund have conducted their Senate Special Committee on Health Care Access and Affordability. They brought together a broad-based coalition of legislators, health care providers, insurance providers, hospitals, doctors, dentist, large and small business leaders. They worked diligently to determine the issues and possible structure for a new Oregon health system that would provide universal access to health care for all Oregonians. The Bates-Westlund plan provides for broad-based contributions to an Oregon Health Fund from individuals, businesses and government ito assure all Oregonians have access to health care. The very poor will have their health care provided under the Oregon Health Plan. The working poor will receive subsidized health policy payments. Everyone else will be required to obtain health care coverage, just as all drivers are currently required to obtain automobile insurance coverage. It is called The Oregon Health Fund program and it provides many well-researched provisions to improve health and not merely provide services to the sick. For a look at S.B. 329 click here.

The third proposal is part of the Oregon Business Plan. It is not yet in draft form, but can be found on page 50 of the OBP’s “Gaining Sustainable Advantage” booklet. It includes the following:

In order to lower health care costs, improve quality, and expand access to care, the Oregon Business Plan recommends the following:

– Use value-based purchasing strategies by employers and public sector purchasers to improve quality and lower costs. Employers should encourage a culture of wellness and personal responsibility, and design benefit plans to improve health, including coverage of preventive services, management of chronic conditions, protection from catastrophic costs, and incentives for wellness. Employers should also create an effective market for health care: consumer choice of health plans, better consumer information, and appropriate consumer cost sharing. Employers should develop expectations and incentives for health plans and providers to encourage higher quality and use of evidence-based care.
– Encourage investment in health care information infrastructure: electronic medical records, secure exchange of health information among providers, standardized measures of quality, and transparent information on costs and quality.
– Expand Medicaid to reduce the number of uninsured and improve access to care. Use additional state revenue to maximize federal matching funds. Increase payments to providers who serve Medicaid patients to improve access to care. In exchange, providers and health plans should reduce the cost shift by lowering charges to privately-insured employers and individuals.
– Increase access to coverage for individuals and small businesses: require individuals to have health insurance, subsidize low-income workers and individuals to enable them to afford coverage, and create an “insurance exchange” to make it easier for individuals and employees of small businesses to purchase insurance.

The final Oregon health plan reform proposal referred to last night is being formulated by the Oregon Health Policy Commission. Like the OBP plan, the OHPC’s specific plan provisions have yet to be finalized. Nevertheless, a representative of the OHPC sent us a draft-summary called The Roadmap For Health Care Reform. It contains the following OHPC health care reform principles and recommendations:

OHPC Guiding Principles for Health Care System Reform

– Health care is a shared social responsibility. Everyone must take responsibility for reform.
– Oregon needs a plan that can be realistically implemented over the next five years by improving on existing system structures and defining new ways to provide care more effectively.
– The health care system is sustainable only if reforms address the relationship between access, cost containment, transparency, and quality.
– Resources will always be limited so decisions about covered benefits must be made through a rational process to achieve access for all Oregonians.
– Reforms must both increase insurance coverage and maintain a strong safety net that serves those who lack insurance.
– Delivery system reforms must improve service integration and align payment incentives to prioritize prevention, continuity of care, and care management.
– Reforms must maximize available federal (especially Medicaid), state, and private financing.
– Coordination with other reform efforts in the state is essential to achieve concrete reforms.

Reform Recommendations
Create a high value health system through the following state policies:

– A Health Insurance Exchange, an entity that can bring individuals, coverage options, employers, and public subsidies together in a way that currently does not exist in Oregon;
– Publicly-financed coverage and insurance subsidies to ensure affordable coverage for lower-income Oregonians;
– A requirement that every Oregonian purchase affordable health insurance; and
– A broad-based employer contribution.

Create a high value health care system by implementing the following delivery system changes:

– Drive public-private collaboration on value-based purchasing, managing for quality, and making the system more transparent;
– Develop widespread and sharable electronic health records;
– Improve health care safety;
– Help all Oregonians establish a medical home; and
– Support community-based innovations that align resources for more cost-effective, higher quality care.

The OHPC reform plan also underscores the need for a thoughtful evaluation plan and includes sustainable financing options to support system change.

The four plans discussed above are not the only plans being proposed. The Cascade Policy Institute, Oregon’s premier free market think tank, has publicized an alternative proposed by economist, Randall J. Pozdena, Ph.D. entitled, “Achieving Universal Health Insurance While Improving the Economy: A Reform Proposal for Oregon”. Dr. Pozdena’s plan is based on the Swiss Model, where everyone is required to buy his or her own individual health policy and the government subsidizes the payments for the poor. In addition, health care consultant, Stephen A. Gregg, has worked extensively for the past decade on the issue of Oregon’s universal access to health care. His proposal is entitled, “Bridging the Ideological Divide in Health Care Reform: An Actionable Plan for Oregon”. Finally, Oregon Senator Ron Wyden has recently presented a comprehensive proposal for reforming the national health care system. His plan, “The Healthy American’s Act” is causing great interest across America.

In conclusion, each proposal has its strengths and each has its weaknesses. The Oregon Legislature will be incapable of formulating the perfect plan, but it must do everything possible to develop the best plan of which this body of elected representative and senators are capable. We take our charge seriously. As the session progresses I will report our progress in this newsletter. The legislative work to reform Oregon health care has begun.


Dennis Richardson
State Representative

Capital Calendar

Monday, January 22nd
House Human Services and Women’s Wellness Committee
8:30 a.m. HR D.

Public Hearing on HB 2022. This bill requires employers of outpatient surgical facilities and hospitals to address the issue of assaults on their employees. Among other things, HB 2022 requires an employer to conduct periodic security and safety assessments to identify existing or potential hazards for assaults. It also requires the employer to develop and implement an assault prevention and protection program.

House Health Care Committee
10:00 a.m. HR E

Public Hearing on HB 2201 which would create the “Oregon Healthy Kids Program.” The program is designed to provide state subsidized health care to all uninsured children, including those with parents making $70,000 a year. Gov. Kulongoski is scheduled to testify.

House Transportation Committee
3:00 p.m. HR 357

Public Hearing (and possible Work Session) on HB 2274 to eliminate the current sunset on the law that doubles fines for traffic offenses that are committed in safety corridors. In so doing, it makes the law permanent.