by Laura Lewis
While John Kitzhaber is gearing up for November’s gubernatorial election, this year marks the sixteenth birthday of the Oregon Health Plan (OHP), Oregon’s innovative prioritized list system which Kitzhaber spearheaded as president of the Oregon Senate in the early 1990s. The prioritized list, a statement of conditions and treatments ranked by effectiveness and cost, was designed to contain costs while providing health care to more individuals.
Since its inception in 1993, however, the Oregon Health Plan has done little to decrease the number of uninsured in Oregon. According to the U.S. Census Bureau, between 1987 and 1993, the average percent of population in Oregon not covered by insurance was 14%, mirroring the national average. Between 2003 and 2008, that average jumped to 16.6 %, just higher than the national average of 15.3%.
Initially, the Oregon Health Plan was touted nationally for its vision to contain costs while reducing the uninsured population. Sixteen years later, we have little to show for our efforts. Recognizing the plan’s inability to provide more access to the uninsured population, Oregon can use the upcoming gubernatorial race as an opportunity to review the limitations of Oregon’s health care system and make changes for more competitive medicine.
Laura Lewis is a research associate at Cascade Policy Institute.
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Thanks Laura for the statistics on the % of the uninsured especially as it relates to the Oregon Health Plan Inception by Kitzhaber. We need to be informed of what has happened—to learn from and not continue a bad course.
I don’t believe there has ever been a comprehensive independent and impartial review of the Oregon Health Plan. Believe something in excess of $20 Billion dollars has been spent on the program over the years…would think that justifies a first rate evaluation. Perhaps most telling is lack of interest by the rest of the world in replicating its formula for “success”.
A Medicaid Proposal in response to Laura Lewis
Obamacare will greatly lower the quality of medical care in this nation and it will very greatly add to the cost of medical care. The 2500 pages of law is unintelligible, unenforceable, and internally inconsistent. It must be repealed. Fortunately, what has emerged as a consensus Republican reform plan is, for the most part, based on sound science and sounder economics. Each component of that plan can be implemented and the results assessed. The planks of that plan are:
1. Equal tax treatments for all health care costs – ending tax discrimination against individual purchasers;
2. Health Savings Accounts – which, by eliminating administrative and insurance overheads, have reduced routine medical costs by up to 2/3;
3. The purchase of medical insurance across state lines;
4. High risk pools to cover those with preexisting conditions;
5. Modest tort reform limiting purely punitive damages;
Each plank of the Republican plan would increase the ability of individuals to choose their own health care and, by giving patients some control of their own costs, the Republican plan will lower over all health care costs.
But will the poor have any individual choices?
In order to insure that the individual choices of the poor is maximized and Medicaid costs are reduced, I would suggest a sixth plank. Federal Medicaid support to the states should come as a block grant, unencumbered by ruinously expensive unfunded and partially funded mandates.
The states would then be free to introduce HSA accounts for the Medicaid patients. Indiana already has done so and it has reduced costs. Funds would be deposited in a state account, accessed by a restricted use debit card, and the patient would be able to choose how that money is spent.
States might also adopt something like the Israeli model for medicaid. Each Medicaid patient is given an insurance voucher of equal value to the health insurers. Each of the plans would have to meet only the minimum of covering catastrophic health care costs and so would not be free to “dump” patients who came to require expensive treatments. But armed with their vouchers, Medicaid patients could shop amongst competing insurance plans. They would be buying the insurance package that best met their needs. And so, for example, some people might wish to insure themselves for psychological treatment, or fertility treatment, or nursing care treatment, or sex change treatment. Many younger people might be willing to choose an insurance plan that agreed not to “dump” them as they grow older even if that plan did not cover some other forms of treatment.
Would this system eliminate the uninsured? No system has done that. Oregon has had massive medicaid expansion for 16 years. It has not reduced percentage of uninsured in the state. Costs have expanded.
If an individual refuses to buy catastrophic insurance they are either poor or not poor. If they are poor, the state will supply them an HSA account and Medicaid voucher. If they are not poor, hospitals will continue to treat them and try to collect their fees. Some of uninsured will go bankrupt and thus be eligible for Medicaid. That is part of the cost/benefit calculation they now make in deciding not to buy catastrophic health insurance. If the Republican reforms are instituted, however, the cost of catastrophic insurance would go down and the availability of catastrophic health insurance plans would go up. Overall, the costs of health care would tend downward.
With those six planks in place we have a chance of containing the costs of health care and improving the quality of health care in this country.
Chana Cox
Lewis and Clark College and Cascade Policy Institute Academic Advisor