Catching up – Day 20 – Medicaid at 50: State Highlight: Oregon

Basics: Oregon Medicaid covers 1,101,237 lives

We’ve talked a lot about the Oregon health insurance experiment, but exciting news about Medicaid in Oregon does not stop there. In fact, the state is in the midst of a pretty radical waiver. Former Governor John Kitzhaber’s previous experience as an ER physician and director of a center for evidenced based policy (seriously!) made for a rare convergence of health policy and politics.

Oregon put everyone in the Medicaid program into Coordinated Care Organizations, which are analogous to ACOs and integrate inpatient, outpatient, mental health, addiction, and social services under a single per-patient budget scheme. Basically, Oregon thought that a) having a medical home and good care coordination is critical; b) social determinants are essential drivers of health, especially for low-income patients. For example, we might not think of a vacuum as a medical expense, but it could potentially save $$$ in avoidable hospitalizations for an asthmatic. Oregon’s waiver gives CCOs the capability to address these upstream determinants that could cost the health system big bucks….and helps patients out before they get in bad shape!

Oregon negotiated a waiver that allowed them a generous budget and a great deal of latitude on how they can spend Medicaid dollars, but the tradeoff is that state is bearing significant risk. If they exceed the expected costs of the 5-year waiver, the state will have to absorb all of the overruns. The good news is that the results of the first year are encouraging: primary care utilization increased 18% and primary care spending by 7%; ER utilization dropped 9% and ED spending decreased 18%. Hospitalizations for congestive heart failure, chronic obstructive pulmonary disease, and asthma dropped dramatically. It remains to be seen whether these gains can be sustained, but Oregon is one to watch.

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