Remarks at Oregon Health Forum
February 28, 2019
Let me start by reviewing our original vision for Coordinated Care Organizations (CCOs), which was threefold. (1) To create a new kind of organization that was community-based with local providers, citizens and governance structure; that would move away from the narrow medical model and focus more broadly on community health; (2) to demonstrate it is possible for the delivery system to assume risk and accountability for quality and outcomes in a global budget indexed to a sustainable rate of growth; and (3) to extend this model to other payers, starting with PEBB and OEBB, then offering it as an option of the exchange and for Medicare Advantage.
Over the first 5-year waiver period, although we made remarkable progress, we remain short of our goal. While the state has maintained the overall 3.4% per member per month (PMPM) growth rate stipulated by the waiver, the average growth rate for the CCOs, has been closer to 6.4 percent, with substantial variation by region. In short, we have not yet definitively demonstrated the central and most foundational goal of this care model: that it is possible for the delivery system to assume risk and accountability for quality and outcomes in a global budget indexed to a sustainable rate of growth. Nor have we been able to develop strategies to extend this care model into the commercial market.
So, there is a lot at stake here over the next five years. First and foremost, what is at stake is the health and welfare of Oregonians. Today, nearly a million people—including fifty percent of our children—depend on our Coordinated Care Organizations for their health care
The long-term stability of the state general fund budget is also at stake. Today, Medicaid is the single largest component of all-source state spending; and the second largest component of state general fund expenditures. It is also one of the three major contributors to the state structural budget deficit—a deficit that cannot ultimately be erased unless the CCO care model is successful bending down the cost curve, and can be moved into the commercial market, including PEBB and OEBB.
Remember, that the state will be reimbursed at only 3.4% PMPM over the next biennium. If the CCO growth rate exceeds that, we will face another revenue shortfall in the Medicaid budget for the 2021-23 biennium. And unless the legislature is willing to reallocate general fund resources from education, housing and other services; we will e forced to revert to the old cost shifting strategies of reducing enrollment, and/or cutting benefits and provider reimbursement. And at that point we put our waiver at risk.
Furthermore, this is the only statewide effort in the nation explicitly seeking to bend down the medical care cost curve, while maintaining enrollment, quality and outcomes. Nowhere else in America have so many been engaged for long in common cause: hospitals, health plans, insurers; and medical, dental and behavioral health organizations and practices; nurses, community health workers and thousands of citizens—working together to address one of the most crucial domestic issues of our time. It would be almost impossible to put that back together again, if we fail to achieve our goals.
Finally, what’s at stake is one of the only working models that can guide national reform. The national health policy debate is polarized largely because neither Republicans nor Democrats assume any change in the delivery model: we either pay for it or we don’t. This creates a zero-sum false choice between cost and access. The effort by Congress to repeal the ACA was an effort to stop paying for the current system. And, without fundamentally changing the health care delivery model, a single payer approach is just another way to pay for the current system, and will no more solve the challenges facing the health care system, than will simply defunding it
The only way to move beyond this gridlock is to advance proposals that seek to expand coverage and reduce cost without sacrificing quality or outcomes—which is exactly what Oregon is trying to do. If we fail to realize the promise and the vision of our Coordinate Care Organizations, we will lose a powerful tool with which to recast the national debate in a hopeful and more productive way.
Going forward we have three major challenges. First and foremost, we must intentionally rebuild a foundation of mutual trust; a sense of common purpose and a spirit of collaboration; to supplant the traditional competitive mindset as we embark on the second phase of our journey. Second, we must understand and address the variation in cost growth and rededicate ourselves to sustainable cost reduction by truly transforming the delivery system. Finally, we must recommit ourselves to the fact that only by engaging the community in a meaningful way can we achieve our larger goal: improving the health of Oregonians.
To me the spirit of this journey is captured in the words of Robert Kennedy during his 1968 campaign for president: “Health care and poverty are inseparable issues and no program to improve the nation’s health will be effective unless we understand the conditions of injustice which underlie disease. It is illusory to think that we can cure a sickly child and ignore his need for enough food to eat.”
The creation of Oregon’s CCOs began as a bold, collaborative effort to transform the health care system. Yet, CCOs remain fragile and evolving organizations that can only survive with leadership committed to the larger common good; leadership with the courage to set aside—or at least put in check—the very human need for power; and the very present urge to compete—in order to hear the voices of the people who trust us with their lives. We need to learn from one another, trust one another; and view this work not as a competition; but as a necessary collaboration between pioneers, steering a course toward a brighter future.
