The stakes are high in Oregon's ambitious remake of its Medicaid program
SALEM, OR – While most states' efforts to overhaul Medicaid have focused on bolstering managed care as a way to hold a lid on costs, in Oregon a radical redesign of its Medicaid program aims to foster cooperation between providers and create a broader whole-person care model for the roughly 500,000 who receive care under the state's low-income insurance plan.
At the heart of the new system are Coordinated Care Organizations (CCO), which are similar to ACOs being adopted for the Medicare population with a major exception: CCOs integrate dental care and mental health in a broader umbrella to allow for better coordination of care for the largest consumers of health services, while also placing an emphasis on primary care and prevention.
The program also recently received preliminary approval from the U.S. Department of Health and Human Services, which has agreed to provide $1.9 billion in funding over the next five years to help the state revamp its healthcare system. The state will reportedly receive a large chunk of that investment – about $620 million in the first year, with a commitment from the state to reduce it overall Medicaid spending by 2 percent in the first year of the program.
The architect of the plan is Gov. John Kitzhaber, a doctor himself, who inherited a budgetary challenge for the Oregon Health Plan of monumental proportions.
"The fact is our current healthcare system is not sustainable," Kitzhaber said earlier this year in proposing the overhaul. "And that became apparent when the one-time money that had propped up our healthcare system in the last biennium disappeared, revealing a 40 percent discrepancy between the available revenue and the cost of those services."
But the new plan will need to get off to a fast start and the timeline is very aggressive: the first CCOs are scheduled to be up and running by July 1. Andy van Pelt, spokesperson for the Oregon Association of Hospitals and Health Systems said the pressure is on for the state and the CCOs to deliver.
"There really is no alternative, the CCOs have to work," said van Pelt. "But the timeline is very aggressive and one of the fears is we don't know what we don't know" about the CCOs.
Along with the pressure lies opportunity, however, since most providers understand the alternative to failure in a new payment model that is looking to provide global payments to community-based CCOs to mange the health of their population. Prior to the launch of the new system, providers were facing cuts as steep as 30 percent of prior Medicaid reimbursements.
One of the first CCOs will include Legacy Health System, the largest provider of care to Medicaid members in the Portland metropolitan area. Medicaid patients make up about 15 percent of the Legacy Health's total patient rolls.
"We're building this as we go," noted George Brown, MD, president and CEO of Legacy Health. "There may be issues we're not aware of right now that may pop up in the future."
That said, Brown noted that Legacy wouldn't need to change much operationally to fit in to the new CCO.
"Right now all of Legacy's primary care clinics are certified medical homes," Brown said. "We are using Epic as our EMR, as are many of the CCO partners. And we've already begun using case managers and care coordinators to ensure our patients are getting the right care at the right time."
Perhaps one of the biggest potential benefits of the CCO model is it will require providers that are competitors to find ways to work together to improve the delivery of healthcare in these local communities for the betterment of all.
"Merely being in the same room to openly discuss strategy is probably the biggest example of finding common ground," Brown said, adding that the groundwork for this collaboration comes from work done a few years ago when one of the state's largest business organizations began bringing healthcare companies together to find a way to reduce the cost of employee health insurance.
"What came out of that early effort were some of the very things we will be doing with the CCOs," concluded Brown.