Why is health system transformation taking place?

Runaway health care costs

Between 2003 and 2009, health care became increasingly unaffordable for Oregon families, businesses and government. The average family health insurance premium rose 44 percent, the U.S. Census Bureau reported. The average deductible for families rose 94 percent. The state of Oregon’s spending on health care coverage for people on the Oregon Health Plan (Oregon’s Medicaid system) and for public employees also rose sharply, outpacing general fund revenue.  By 2011, Oregon faced a shortfall of about $850,000 for health care services provided by the state.

In Multnomah County, such a shortfall could affect up to 148,000 people who access care through the Oregon Health Plan. In addition, one in four adults under age 65 in the county, or about 133,000 people in 2011, lack health insurance altogether.

Legislature confronts crisis

Beginning in 2009, the Oregon Legislature moved to confront the crisis. Legislators created the Oregon Health Authority, placing five state agencies related to health into one, making the Oregon Health Authority the single point of accountability for health care costs. The Legislature also created the Oregon Health Policy Board, a nine-member citizen board to inform policy for the Health Authority’s transformation efforts.

Federal legislation contributes to reform

The United States House of Representatives passed health legislation in 2010, accelerating the reform begun in Oregon by expanding coverage to low-income working families and those with pre-existing conditions who had been blocked from other health care plans.

Oregon lawmakers create coordinated care organizations (CCOs)

In 2011, the Oregon Legislature took the next step in statewide reform, saying that the lack of basic health care coverage was harming  health, but also job growth and economic development. House Bill 3650 created a new system  in which health care services would be delivered by coordinated care organizations or CCOs.

Instead of a person navigating numerous unconnected providers for physical, behavioral and oral health, they would enter one coordinated network operating under a fixed budget.

Health organizations from across a community would have incentives to work together to improve the health of their clients. Each client would have a consistent and stable care team designed to provide independence, dignity and choice.

The Oregon House of Representatives approved House Bill 3650, with Senate amendments, on June 30, 2011 by a vote of 57 to 1. Gov. John Kitzhaber signed the bill into law July 1, 2011.

Community develops plan for transformation

The Oregon Health Policy Board was charged with determining  how to implement the law. After months of meetings and the input from 133 work group members and 1,200 Oregonians, the board forwarded a plan to the Oregon Legislature on Jan. 24, 2012. The proposal lays out the governance, global budget and criteria for coordinated care organizations.

Building on work shown to be successful across Oregon, CCOs will shift focus and financial incentives away from emergency and acute health care toward prevention, early intervention and community-based management of chronic conditions. This will be a change from the current fragmented and costly system of 16 managed care organizations, 10 mental health organizations and eight dental care organizations that clients must navigate.

Legislature to consider final plan

On Feb. 23, 2012, the Oregon Legislature overwhelmingly approved Senate Bill 1580, the Oregon Health Authority's implementation plan for coordinated care organizations. The measure also requires quarterly reports to the Legislature on health care delivery. Gov. John Kitzhaber signed the bill into law on March 2.

The coordinated care organization, or CCO, will replace the current managed care organizations (MCOs), mental health organizations, and dental care organizations for the Medicaid/Oregon Health Plan populations.

Most people will continue to see the provider they see now. The improvements will change the network around them. Consumer choice is a critical part of transformation.

Multnomah County will be there for residents as a safety net provider of service, as a public health and mental health authority and as a county government.