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.

  • Jerry

    If you care to listen I can tell you right now that any coverage of any kind that is extended to people who are in Oregon illegally will not have my support.

    • Jerry — Have I got news for you… you’re ALREADY paying for illegal immigrants to receive health care! It’s called the Emergency Room; it’s wickedly expensive and it’s used for primary care by anyone who is undocumented or just can’t afford health care… and when they skip out on the bill, the hospital doesn’t just EAT those losses… they pass them on to people who actually BUY those services, like you… and me… and the state’s largest health care purchaser — the State of Oregon! So yeah, you’re paying for them already. I think what Rep. Richardson is saying is let’s look for a way to be screwed LESS, and I agree with him.

  • John Fairplay

    Without tremendous revenue increases – or gutting of other programs – universal health care, paid for by the taxpayer – is not an achievable goal. Former Governor Kitzhaber already led us down this garden path once with the “Oregon Health Plan.” The OHP has been an abysmal failure, delivering none of the benefits promised – to either low-income Oregonians or taxpayers. Health care is not a “right” it is a choice. If some Oregonians wish to go without coverage, then it is their right to make that choice and to suffer whatever consequences their own free choice brings. There is no reason for hospitals to bail these people out with free emergency room care, and the hospitals should not be forced to do so. We must have a system of individual responsibility where individuals who are able to do so pay the full cost of their own health care, and even low-income Oregonians pay as much of their own costs as practical.

  • Jerry

    John – you are absolutely correct! The politicians who want to give everyone free health care with out money are simply expanding their power base and revenue collections. They do not care about the people at all. If they did they would not encourage dependence on government and hand outs. If they truly cared they would help someone out locally, in their own community, with their own money.
    Sadly, none of them do.
    I only hope Dennis reads some of these comments. He is obviously wasting his time and our money.
    What a pathetic, sick, sad commentary. If health care should be free, why not housing, food, clothing, and entertainment. These are necessary, too, for a complete, full life.
    Why would anyone bother working? If you need anything, just ask, and someone will give it to you. They feel better and so do you.
    What a wonderful world.
    I often wonder how people managed to stay alive in our country’s past when all this nonsense did not exist.
    Dennis – why don’t you spend your energy getting more state police hired and quit dreaming up ways to spend money that is not yours.
    Very sad indeed.
    PS – you can gut some programs if you wish – cultural trust, state dept. of ed, public broadcasting, economic development, etc., etc.

  • Chris McMullen

    Well said Jerry, you have my sentiments exactly. I’d appreciate it if state reps like Dennis would take a peek at the huge problems with the Canadian system. If it was so great, Americans would be flocking to Canada for treatment, not the other way around. If he’d speak to MDs and administrators who’ve dealt with the Canadian system, I know he’d have a different opinion regarding socialized medicine.

    Furthermore, look at our public education system. We spend tons of money on a bureaucracy that produces mediocre results. Is it wise to construct a health system based on the same premise?

    Getting LESS government out of health care is the only legislation I’ll support.

  • Jerry

    Why not just stop the legislative work to reform health care, Dennis? We don’t want it. Plain and simple.

  • COMMUNISM is when I have to pay for YOUR Healthcare, even if you smoke two packs a day and down that with a bottle of Vodka.
    CAPITOLISM is when the best minds in the World of Medicine work in America because they will be compensated for their great work.

    MOST of these Un-insured are ILLEGAL ALIENS and are not supposed to be here and would leave IF they could not get a Job or Benefits from Tax payers.

    Imagine the Billions saved in Health Care when 30 Million who do not WANT INSURANCE (they want that money to go home, I am an Agent, I know) and avoid paying the Bill with false names and addresses were all gone.

    PLUS wages would rise for the mostly Bule Collar workers that do not have coverage and Employers may actually pay for it, like they used too. Now, with a non stop flow of Illegal & desperate workers, Employers don’t have to offer any carrotts.


  • Tim Lyman

    If you want all children to be insured, make it a legal requirement for all employed parents whose employer does not provide health insurance as a benefit to purchase health insurance for their kids from a private insurer and make it a payroll deduction so they can’t spend the money on a larger TV, a faster car, or the other crap that financially irresponsible parents buy instead of health insrance for their kids. If a parent is unemployed and is receiving benefits the health insurance premium can be deducted from their benefits, same for any sort of welfare payments. Step 2, scrap the Oregon Health Plan. Whatever you, don’t create a whole new bureaucracy or hand the job of managing an insurance plan to the incompetents at DHS.

  • Steven Plunk

    No one ever talks about costs, only insurance. Until costs are under control we will continue to see fewer insured as the rates go up.

    We provide only one level of care, the very best regardless of cost. Why not allow some people to choose a reduced level of care that is more affordable and attainable.

    Health care is somewhat immune from market forces since comsumers don’t have the knowledge necessary to make informed choices. The market failure must be addressed in some way.

    Hospitals must stop the arms race. In Medford our two main hospitals waste money on TV advertising, public relations, and building competition. They compete about who has the best cardiac care, the best to have a baby, and even concierge service in your room (people dressed as butlers for gosh sakes). They no longer serve the public but serve themselves.

    The whole medical industry needs to look within itself rather than at insurers to see where the cause of the crisis lies.

  • mmmarvel

    Dennis –
    I agree that health care needs to be looked at but I also agree with all those above who think that getting illegals outta here will lower the cost without having to change the system. It would also be nice if Oregon wasn’t such a nanny state – our state demands that if an employer wants to offer insurance to his employees it must have this, this and this. For example, it MUST have maternity coverage – well, some of us are too old to need maternity coverage, but our employers can’t give us the option of ‘This insurance coverage covers this and this other plan for those of you who don’t need maternity coverage costs this much’ – usually your choice is how much the monthly payment will be and based on it, how much your co-pay will be. Let us ACTUALLY be able to make choices.

    Three other items of note:
    1) Yup, the former governor is merely trying a new version of the failed OHP – that plan was and is a disaster. Please don’t make all of us have to live under it or some regurgitation of it.
    2) How will the ‘new’ plan cover us when we are out of this state?
    3) Do you like rolling out the red carpet for every unemployed person in the US? If we provide ‘for all Oregonians’ the next thing you know, we’ve got a ton of ‘new Oregonians’ – the lure is impossible to resist. There will be so many more new residents the plan will be belly up (or some variation of belly up) within the first 6 months.

    Think CAREFULLY about what you are thinking about doing – it’s a new Pandora’s box and I don’t like what I see waiting to get out.

  • Captain_Anon

    I can’t give you statistics, but my gut tells me that the Illegal immigrants have a huge toll on our system and cost us millions as tax payers. that is one area that should immediately be addressed. Our laws say that thier kids are US citizens and we have to respect that. but health care workers should not be hog tied – they should be able to report illegals the ICE. thier parents should be required to pay for thier personal healthcare. and if we solved the illegal immigrant problem, it would lesson the burden on our schools. they are jam packed with kids of illegals. no wonder our schools are busting at the seems. and let’s not forget our jails. what is it, like 25% of the metro’s jail beds are taken up by illegal immigrants? what a HUGE drain on our resources.