Oregon's Medicaid Experiment

A story on NPR titled "Oregon's Medicaid Experiment Represents A Defining Moment" summarized an ambitious efforts to efficiently manage health care costs. Gov. John Kitzhaber, a Democrat and a former emergency room doctor, has convinced the federal government that he has a way to make Medicaid treatment better, and cheaper, by completely changing the way the sickest people in Oregon get health care. Under this new system each city will have its own umbrella group for caring for the Medicaid population, known as a "coordinated care organization." These umbrellas will include hospitals, doctors, mental health providers and dentists. Kitzhaber's vision is that all those health care businesses will stop competing so directly and will be linked electronically so that the systems can talk to each other — and patients can go wherever they need to get the most cost effective and high quality care. The goal of creating local coordinated care organizations is to improve care and reduce costs so deeper reductions won’t be necessary. Providers would have more flexibility in treating their members. Metrics would allow for providers and CCO to be paid based on member outcomes, instead of by just the number of services provided. For example, by keeping members at their healthiest and out of high-cost emergency rooms, providers would be paid more than if their members’ health did not improve. There are opportunities for shared savings when members are healthy and not in need of high-cost care such as emergency room visits Under the current system, hospitals and doctors don't have a financial incentive to make people better. Quite the opposite: If a patient keeps coming back, they keep getting paid. But under the new system, the quicker a patient gets better, the more money the coordinated care organization can keep. Kitzhaber believes that over the next five years, Oregon will be able to save the feds every penny of the $2 billion the state's been promised. "We estimated that if every state Medicaid program in the country were to adopt this model, the net savings would be about $1.5 trillion over 10 years," he said The question remains why Florida legislators stubbornly pursue a failed experiment to privatize Medicaid and refuse to examine other options? In my opinion, Oregon has taken a bold step forward in challenging all participating healthcare providers to collaborate to manage the scarce healthcare resources for the benefit of the patients and our community. Yours Bernd Addendum: What are "coordinated care organizations" and what is being proposed? House Bill 3650 proposes organizations in Oregon that would administer the health care coverage for OHP (Oregon Health Plan) members through a collaborative network of service providers. The vision is that CCOs would be a community-based network of patient-centered care, driven by local need. The idea is to take the best thinking in Oregon and creating local organizations focused on one thing: reducing the barriers that stand between members and good health. Because each community is different, there may be different models for CCOs. The criteria for how CCOs would operate are being developed with input from members, providers, stakeholders and the public. Today more than 80 percent of Oregon Health Plan members receive physical and mental health through a type of managed care organization that receives a set rate per patient for health care. Under the CCO model, a couple of key things would change. First of all, a CCO in a community would be responsible for coordinating all of the mental, physical and dental care for OHP members through collaborative relationships. Under the proposal, a CCO also would be paid differently than MCOs are today. There would be a global budget for all care, rather than a set rate or a “capitated rate” for each different type of care. At the same time, the CCO would have more flexibility to manage dollars in a way that pays for improved health rather than having to rely on approved billed services. Performance measurements for CCOs would provide incentives for better care. And CCOs would be accountable for addressing avoidable population differences in health care outcomes. Under the proposal, local providers would have the means and incentive to work together for the population they serve. There would be more flexibility for preventive care, chronic disease management and culturally competent care. The CCO would manage a global budget and if performance standards were met, providers could share in the savings. Source: Coordinated Care Organizations