Oregon’s 2017 legislative session, and the widening cultural gap in Oregon health policy

Ask folks who worked in the legislative session this year, and they’ll tell you:  there were some bad feelings coming out of this session.

Following the failure of Measure 97, an initiative to raise corporate taxes on businesses with more than $25m in revenue, Salem was heading into a difficult fiscal situation.  Their budget had a shortfall of $1.7 billion on a budget of about $20 billion.

In the health care space, where Oregon was already drawing down a much higher federal contribution that most other states (FMAP), there were significant gaps.  At one point, legislators even floated the idea of ending Medicaid expansion in order to close the funding gap.

Last fall, the governor’s staff pulled together a group of folks to outline a set of funding proposals to bring to the legislature.  That group had a cross section of different voices participating.  At the same time, a separate group of industry stakeholders was also meeting.

Both groups had the intention of finding solutions and building stakeholder support.  But, the fact that they were meeting separately and largely independently from one another ended up becoming problematic, for a host of reasons.

One reason it was problematic is that it didn’t appear to legislators like the broader health care community was speaking with one voice. Key budget writers had to tell the health care industry to, effectively, “get on the same page with the governor.”

Another reason was less about policy and more about optics.  With a governor, speaker, key budget writers and legislative leaders that were women, it turned out the industry group meeting separately from the governor didn’t include any women.  As one person told me, and which I heard variations of throughout the session, “We don’t need a bunch of rich, white men coming and telling us how to fix a program that covers health insurance for poor people that are mostly women and children.”

This critique had nothing to do with policy – it was entirely optics.  It’s also perhaps reflective of the shifts in Oregon’s demographics over the last decade or so.  The Portland area in particular is increasingly cosmopolitan and diverse, and has representation that reflects that.  These legislators are largely Democrats, and Democrats control the levers of legislative power.

On the other hand, health care generally, not just in Oregon, continues to be largely dominated by white men.

This cultural and demographic divide is important.  Where Portland and the Democratic Party are increasingly ethnically diverse and have a culture that reflects that vibrancy, health care generally speaking is less diverse – ethnically, economically, and in terms of gender.  That has supported a culture in health care that, again, generally speaking, is already relatively conservative in nature.

This isn’t specific to Oregon, and I certainly don’t ascribe motives or values to any of the players. I’m simply stating that the gap between the legislature and the industry is growing wider.  Moreover, the social capital that may have existed previously in Oregon health policy has ebbed significantly, a view I’ve shared previously.

So, the gap is wider between policy and industry, there are fewer natural relations in place now than previously, and ultimately, no amount of work prior to the session could have fully solved this.

Within that context, meeting separately didn’t help things.

As the session went on, stories came out in various outlets that didn’t help build coalitions and trust.  They helped foster ill will instead.  I’m not going to link to them all here, but if you’re reading this, you know what those stories were.

Business groups got angry.  Some CCOs got angry.  Some provider associations got angry.  Some labor groups got angry.

In the end, a provider tax and a premium tax were adopted to fund Medicaid.  There was general agreement among many stakeholders, but not everyone was happy.

Rep. Julie Parrish has announced she intends to launch a campaign to repeal the tax package.  The “referral” will go to voters after she collects the necessary 58,000 signatures to move the issue to the ballot.

I’m told she has raised the money it will take for the signatures – about $250,000 – so it’s now a question of whether she can get folks to sign up.  Most stakeholders I’ve spoken to believe it’s likely she’ll be successful.

Legislative leaders thought it was so likely she would be successful that they voted on a special election date for the referral, should it move to the ballot.  That day is January 23rd, 2018.  The idea there is that by moving it earlier in the calendar year, legislators can find another solution in the short 2018 legislative session.  The alternative would have been to wait until the 2018 general election in November, and a consequent loss of the $650m in revenue that would have otherwise been collected by the tax package while the state waited for November.

The question is who would fund Parrish’s campaign?  Some have told me they think the hospital association might, but I think that’s probably unlikely.  Hospitals gain from more funding of Medicaid, not less.

Health plans might fund it, but it would likely not be Medicaid plans for the same reasons I doubt hospitals would fund it.  It’s possible commercial carriers would get behind a repeal, but I’m not sure it makes enough political sense to spend political capital there either.

I haven’t asked everyone I might on this, including commercial plans or hospitals.  I expect they will keep their cards close to their chest on this, as they probably should in these early days.

But, when we are talking about Medicaid funding in 2018, it won’t be a new topic, and it won’t just be about Medicaid.  It’ll be within the context of the cultural gap between health care executives and health policy leaders, and will stand in the shadow of the tough 2017 session.