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The Failure of the Oregon Health Plan

Steve Buckstein

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by Steve Buckstein

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A new report by Cascade Policy Institute looks at how well the Oregon Health Plan met its promised goals. Launched in 1994, the Oregon Health Plan sought to use a prioritized list of conditions and treatments to simultaneously expand coverage, control costs and foster provider participation in the state’s Medicaid system for low-income residents. By explicitly rationing care, the plan was called a “bold experiment” and was supported by political leaders of both major parties.

Now, sixteen years later, the report’s authors find that:
“[L]ike the experimental drug that performs no better than a placebo, the Oregon Health Plan has produced results that are not significantly different from the outcomes seen by the U.S. as a whole.”

It’s safe to say that if we showed a knowledgeable observer the results of five random states’ Medicaid programs, they would not be able to pick Oregon out of the crowd.

Cascade’s report explains why the Plan failed to achieve any of its primary goals. These failures should warn politicians who want to duplicate the Plan’s approach in other areas. Gubernatorial candidate and chief architect of the Oregon Health Plan, John Kitzhaber, recently announced he wants to apply the Plan’s rationing approach to provision of other state social services. But given this approach’s failure so far, Oregonians might be wary about trying it again.

Steve Buckstein is founder and Senior Policy Analyst at Cascade Policy Institute, Oregon’s free market public policy research organization.

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