Medicaid costs | OHA cuts | Martin O’Malley

Oregon’s budget deficit as a percentage of its overall budget is among the largest you’ll ever see in a state. It could offer a transformational opportunity for health care – but it probably also means an extended session into July. It’s some of what we’re watching this month.


1.  Can the current Medicaid model be maintained?

This is the central health policy question heading into the 2017 budget. But, the right question might be this: “Is the current system the best way to spend the health dollars Oregon has?” Some key stakeholder groups are working on that question privately, but there aren’t yet any clear pathways forward.

A recent RAND study commissioned by the legislature said a single payer model could cover all Oregonians with little change in overall health costs, but that appears still politically untenable. A new bill from moderate US Senate Republicans would grant wide waiver authority for Oregon, but that may not pass before legislators have to make decisions. Rep. Mitch Greenlick thinks the answer is increasing the state’s Medicaid provider tax and tightening of the state’s community benefit requirements for non-profit hospitals.


2.  Budget: 27% cut to OHA

The budget framework submitted by the budget committee chairs was a more realistic budget than Gov. Brown’s, which otherwise included 7 new revenue sources. Instead, within almost entirely existing revenues, the co-chairs closed a $1.8bn budget gap, in part, with a 27% cut to OHA of almost a billion dollars.

Medicaid expansion would be rolled back for 335,000.  Fifty medical services would be cut from the prioritized list.  Some wards would close at Oregon State Hospital. The session will be a long one, however, and things will likely shift a number of times before a final budget – with cuts and new revenue – is adopted.  Stay tuned.


3.  Wyden says Price is “ducking” questions

After listening to the Senate HELP and Senate Finance hearings, the performance of both sides can be boiled down to two clips. This one with Missouri Sen. McCaskill and Rep. Tom Price both growing frustrated over “beliefs” and “principles” encapsulated most of the conversation.

A second was from Sen. Ron Wyden in classic form. He used a bit of humor, cited his “respect for (Price’s) willingness to serve.” But then Wyden blistered Price about “ducking” Wyden’s questions and restated “ethics questions” related to his stock purchases. From Wyden: “George W. Bush’s ethics lawyer… said he hasn’t seen anything like this before and I’ve been teaching ethics for 30 years.”



4. Video: Martin O’Malley

We hosted Martin O’Malley this month for a conversation about health policy in blue states during the Trump Administration. O’Malley is the former Governor of Maryland and was a candidate for the Democratic Party nomination for President in 2016. It was a great event, underwritten by Schwabe, Williamson and Wyatt, and co-produced with the Portland City Club and Physicians for a National Health Program.

We created this short highlight video of O’Malley’s remarks, along with highlights from the panel conversation that followed with former Gov. John Kitzhaber. The video from the full event is here.


5. The Medicaid waiver news is not great

There is some head shaking among stakeholders related to the recent waiver announcement from the Brown administration. It provided legal authority to continue the CCO model but provided no money to maintain it. All future savings will accrue to the federal budget and none will be returned to the Oregon health system.

From our write up on it:  “Here’s the bottom line:  Oregon got certainty from this waiver that it could legally continue the CCO model. In exchange, Oregon got uncertainty about whether it could financially sustain it. The feds got certainty that it would have no future liability beyond 3.4% inflation and had to pay nothing get that. I’m not sure any celebrations are in order in Oregon Medicaid.”