Oregon was an early health insurance exchange innovator, receiving federal funding to design the website and IT system before the exchange -- now called Cover Oregon -- was even established by the legislature.
Created as a public corporation in 2011, Cover Oregon is getting ready for enrollment in 2014, aiming for at least 125,000 initial consumers. Executive director, Howard King, who goes by the name Rocky, thinks the exchange can bring accountability to Oregon's healthcare delivery systems though carrier contracts with robust provider metrics.
A veteran bureaucrat, King was the executive director of the Oregon Medical Insurance Pool, the safety net insurance program, for almost 20 years, and he shares government roots with Oregon's current Governor, Democrat John Kitzhaber, a medical doctor, also governor during the 1990s, who recently led the transition of Oregon's Medicaid program into a community care organization system with a global payment model.
The community care organizations are aiming to carve out learner, value-based delivery models and King wants to do the same with the exchange, using quality metrics for both providers and insurers -- with the authority to increase standards incrementally over several years.
In an interview with Healthcare Payer News, King talked about coaxing accountability into the state's healthcare system through Cover Oregon, how the exchange is going to be an "active purchaser" by way of rate review regulations and how the HIX is still a sprint to the deadline.
HPN: What are the problems in Oregon's healthcare system you're trying to fix with the exchange?
King: We, like every state, have the issue of the uninsured. They get care. It's often in the wrong place, at the wrong time. It's not an insurance issue. We have not had a healthcare system that can contain costs at a level that people can afford. You can't have 10, 15, 20 percent increases every year without having tremendous impact on people's lives. Much of that impact has occurred through higher deductibles, people dropping coverage and larger co-pays. It's fine to get everyone covered, and we'll hopefully do that. But we have to make sure we bring better quality and value to the dollars that are going in, and that we hold the system accountable for health, not just for appointments.
HPN: How do you think the exchange will be able to introduce that kind of accountability into health insurance markets? Part of the plan is having common quality metrics for the state's Medicaid program and the exchange plans?
King: Coming out, I don't have a lot of leverage, because I need carriers to participate. 2015, 2016, 2017 are really different. You're going to see a greater focus on the quality of value standards that we require of the carriers, and that they have to include in their contracts with providers throughout the state.
There's a chart that we're going to be coming out with in the next couple months that shows the CCOs, the state employee benefit board, the exchange and school district. The value is bringing together large populations and a variety of different purchasers and really saying, "We've got to transform the delivery system." The Medicaid CCO is the laboratory. That's direct contract with providers. The exchange doesn't directly contract with providers. So we're really testing this model out with Medicaid. They have coordinated care models, global budgeting, patient centered medical homes. They're going to test that stuff out.
We're not going to require or offer community care organizations through the exchange, although they could always do that. But we are going to say (to insurers) that the delivery systems that works over the next year. "In 2015 guys you're going to have to start building them in your contracts. And if you can't sit down with providers and work that out, we're going to have to talk some other time." We want to build in those that are working.
HPN: Oregon has one of the most competitive health insurance markets. About how many carriers are going expected to participate in Cover Oregon?
King: We put out a request for application. We've promised them that until April, the number of carriers and who the carriers are will be confidential because of competitive reasons they have around network contracting.
I am at liberty to say that if every carrier that has said they're going to participate and every carrier puts in as many plans as they said they were going to put in, I have too many choices, and we're going to be figuring out how to limit some of that. A segment of those carriers I really question whether or not they're going to be able to deliver behind their letter of intent. There's nothing wrong them pulling out; there's no financial penalty.
Every carrier can offer up to 14 plans in the individual market, 12 plans in the group market, a catastrophic and a healthy kids plan. Then we have some room for them to add innovative plans, around network configuration, around health engagement models, similar to AFSCME models. They have some room to expand the number if they're willing to innovate. If they don't innovate, you have three plans for middle categories.
HPN: Cover Oregon's regulatory model is described as an active purchaser, but it's mostly the insurance commissioner that's regulating rates in Oregon, on and off the exchange?
King: In Oregon, we have a very robust premium approval process. We are going to be an active purchaser using any leverage we can with the insurance division around the rating process, by providing grades around quality. But I can't negotiate a price that's any different than what's offered outside the exchange.
I assure you that no unreasonable rate will be sold through the exchange, because by definition no rate in Oregon can be approved by the insurance commissioner that's unreasonable.
Oregon's unique. When you compare Oregon to California, Arizona, Idaho, New Mexico, we are on the forefront of rate negotiation as a state, not just the exchange. In California, if Blue Cross wants a 30 percent increase, they'd put a 30 percent increase out there and do it. Nobody can say no to them, other than the politics. Oregon is not a state where there's two carriers. There's a good 8 to 10 major carriers; the market's evenly divided. These carriers know in Oregon that they don't have a lock on the market. This is not Massachusetts, where there's two main carriers on the commercial side.
HPN: School districts and public school employees are going to have the option of buying insurance through the exchange in 2015. How's that going to work?
King: This was not something the exchange put forward. This was a proposal in the legislature, kind of a negotiation between the house Republicans and house Democrats, to ensure that the exchange business plan was adopted. A lot of school districts would like to pull out of the Oregon Educators Benefit Board Medical Program. Those districts that want to pull out generally have either younger or healthier populations and can get coverage less expansive than what they're paying today.
The statute said basically to develop a program that would allow school districts to voluntarily opt-in to purchasing through the exchange. The second piece says you have to sit down with school administrators, teachers unions, representatives of the different associations, and you have to design what it is you're going to offer and how it is you're going to offer it.
I do not want to be presumptuous and say that I know what this is going to look like. Mid-2013, when we kind of have are implementation set. I'm talking to school district representatives and saying I need another six or seven months to do what I'm doing, making sure that I can land the small jet on the runway.