Background on The Oregon Health Plan A primer for by whattaman


									 Background on
       The Oregon Health Plan
A primer for the July 18 Friday Forum prepared by
the City Club's Health Care Issues Committee
Ted Falk and Dave Cook, Co-Chairs

Vision of Universal Coverage
The "Oregon Health Plan" is famous for its policy innovations, enacted in
1989. (Figure 1) By the time the plan started operating in 1994, some
principles were already compromised. For example, the method for achieving
universal access to a basic level of care depended on an employer mandate,
which the US Congress would not allow. Other innovations have flourished,
such as evidence-based assessments of the effectiveness of health services
technology, which Oregon last year extended to pharmaceuticals.

       Figure 1: Policy Innovations
       a. Universal access to a basic level of care
                 Public process to define a "basic" level of care
                 Funding for health care must be balanced with other programs
                 which also affect health
       b. Rationing of medical services
                 Using savings from rationing to expand number of people covered
                 Explicit rationing at the highest level of policy-making
       c. Creation of a prioritized list
                 Publication of a ranked list of all services
                 Excluding all services below "the line" public funds can cover
       d. Public involvement with health policy-making
                 Seek public values at community forums
                 Incorporation of public values into rankings
       e. Reliance on health services technology
                 Systematic, objective model of priority setting
                 Incorporation of outcomes research and cost-benefit analysis

       Source: Marmor and Jacobs, Can Med Assoc Journal 2001, vol. 164, p. 1586, Table 3

Drawing the Line
The innovation that most sharply and controversially characterizes the
systematic approach of the Oregon Health Plan is its commitment to
providing a standard health benefit based on ranking the effectiveness and
value of all medical treatments. To determine which conditions are to be
covered, Oregon's Health Services Commission ranks diagnoses from the most
important (treatment has the greatest impact on health status) to the least
         Background on
                             The Oregon Health Plan
Currently, head injury is ranked as number one on the list. This means that
head injuries are the condition most likely to cause death if untreated and for
which effective treatment is available. Lower down on the list are conditions
that have less impact on health (e.g., low back pain) and conditions for which
there are no effective treatments such as the common cold.

The Health Services Commission creates the "prioritized list" of
diagnoses paired with the treatments and the Legislature sets the funding level
for medical services. Those funds are applied to the list, starting with number
one and descending until the funds are exhausted. Currently, funding
covers the top 558 condition/treatment pairs out of a possible 736.
Condition/treatment pairs below line 558 are not covered.

Raising or lowering the coverage line determines the cost that the Oregon
Health Plan pays for an enrollee. (Figure 2) The dollars saved by prioritizing
benefits can be used to provide less expensive, basic/preventive services to
additional people.

         Figure 2: The Prioritized List: Cost Per Oregon Health
            Plan Member, Depending on Where Line is Set

   Source: PricewaterhouseCoopers, Oregon Health Plan Medicaid Demonstration: Analysis of Federal
   Fiscal Years 2004 - 2005
 A primer for the July 18 Friday Forum prepared by
 the City Club's Health Care Issues Committee
 Ted Falk and Dave Cook, Co-Chairs

Medicaid Expands
The federal Medicaid program was created in 1965 to provide health care
through state-administered programs to needy individuals who are disabled,
families with dependent children, blind or aged. The innovations of the
Oregon Health Plan have been applied primarily to Oregon's Medicaid
program. Starting in 1994, the Oregon Health Plan increased the number of
Oregonians Medicaid covers by adding new populations. Under the expanded
program, adults, families, and children are covered up to a defined income
level for each group.

The number of Oregonians eligible for Medicaid almost doubled in the first
year of the program, with a corresponding drop in the number of uninsured.
Subsequently, the number on the Oregon Health Plan has increased but so has
the number of uninsured, as the current recession throws more people out of
health coverage than the state budget covers. (Figure 3) Even with this reversal,
Oregon's Medicaid expansion over the past decade has reduced the number of
uninsured from 18% to 14%.

                Figure 3: Percent of Population Enrolled in the
                   Oregon Health Plan & Percent Uninsured

  Source: Analysis Evaluation Unit, Office of Medical Assistance Programs; OHPR Oregon Population Survey
         Background on
                                The Oregon Health Plan
Costs Increase
The reduction in the number of uninsured Oregonians has been expensive. In
the first five years of the Oregon Health Plan, according to US census figures,
the share of state health expenditures paid by Medicaid increased by one-third,
from 12% to 15%. The budget increases have been dramatic: the program in
2001-03 is four times its dollar size a decade earlier. (Figure 4) The pain is
eased by federal matching funds, which pay over 60% of the costs, and by
tobacco funds. While the 2003-05 state budget remains in flux, the proposals
under active consideration would reduce the number of people in the Oregon
Health Plan, thus increasing the number of uninsured again.

                     Figure 4: Oregon Health Plan Budgets

Source: Department of Human Services, Office of Finance Policy Analysis, Budget Section (1997-2005);
Office of Oregon Health Plan Research and Policy (1991-97)

Who Is Uninsured In Oregon?
According to the Office of Oregon Health Plan Policy and Research, 437,598
Oregonians, or 13% of the state's population, do not have health insurance.
Income is the main factor determining who is insured. One quarter of those
whose income is at or below the federal poverty level are uninsured. A smaller
percentage (19.4%), but a larger number, of those from 101% to 200% of the
poverty level are uninsured. The number and percentage of uninsured
decrease as income rises. (Figure 5)
A primer for the July 18 Friday Forum prepared by
the City Club's Health Care Issues Committee
Ted Falk and Dave Cook, Co-Chairs

       Figure 5: Uninsured Oregonians by Income Level

                    Source: Oregon Population Survey 2002

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