The math is inexorable. Most Oregonians do have health care. The costs, though, keep going up faster than incomes. Gov. Kate Brown summed it up: “Per capita health care costs in Oregon are growing faster than the national average, and too many families who have insurance can’t use it due to out-of-pocket costs.”
It would be irresponsible for Oregon’s legislators to not try something. So how does Oregon do something?
The Legislature gets a full plan this week. Basic pieces of it include:
1) Limit the cost creep to 3.4%.
2) Gather up data to better understand why costs rise.
3) Ramp up value-based payments for care. That’s not a new effort. Medical payment systems have conventionally relied on fee-for-service, volume-driven models. The push has been on to incentivize payments based on cost, outcomes and quality.
4) Monitor for unintended consequences.
Are you afraid of what this might mean for Oregon health care? Will equity of access to care improve? Well, there is good reason to wonder.
There’s also a great deal of uncertainty about what the penalty might be if payers or provider organizations exceed the cap. The committee documents refer to “a meaningful financial penalty” and “escalating” penalties if transgressions continue year after year. There is language suggesting the size of the organization would be taken into account and other relevant circumstances, such as what an organization did to improve.
Oregon legislators did already approve a state tax on companies that taxes them even if they do not make a profit — the corporate activity tax. Are we to expect they will show more flexibility to health care organizations? Or will the penalties become a de facto means of driving private health care organizations under to be replaced by a government system?
Similar health cost cap programs have had some success in controlling costs, such as in Massachusetts. What will this Legislature cook up for Oregon?