Four implications of Lynne Saxton’s departure from OHA

Lynne Saxton’s departure from the OHA is big news for Oregon’s health care transformation project.  The Portland Tribune did a good job of reporting the story that led to her ouster, and the Portland Business Journal had smart follow up.

But the importance of Saxton’s leaving is consequential to, and perhaps in some ways an existential threat to, Oregon’s CCO model.

We chatted with a number of stakeholders, including at the state, among CCOs, and with elected officials.  As a result, we came up with four key implications and things to watch as this story continues to play out.

1.  Lynne Saxton represented the last of Oregon leadership connected to the CCO transformation model. That lack of connection could be a threat to the transformation experiment.

With the most prominent visionaries of the CCO development process at the state long removed from office (Kitzhaber, Bonetto, Goldberg), Saxton was a tether to the old guard at the OHA that built the CCO model.

Here’s what one CCO executive to me, something I heard repeated in spirit in other discussions.

“She’s not the visionary that Goldberg was, but she understood the CCO model, she advocated for it, and she was committed to it.  It’s not clear, now that she’s gone, who the advocate will be at the state to take the transformation model into the procurement next year, into the legislative session, and make sure the CCO model continues.  We may just be heading back to managed care.”

Governor Brown is well liked by many stakeholders in health care.  However, it’s clear health care is not an area of primary interest for her, likely for both personal and political reasons, according to folks I chatted with.  That view of the governor, along with the question of policy leadership, has created some anxiety among health care stakeholders.  With the 2018 Medicaid procurement looming, folks are getting antsy anyway.

Saxton’s removal exacerbates that anxiety.

 

2. Corporate turnarounds are hard.  Turnarounds of state agencies are even harder.

Lynne Saxton knew the OHA was a turnaround project when she was hired in 2014.  A primary area of concern was the culture at the OHA, something that a number of folks believed had degraded considerably throughout the 2013-2014 period.  You’ll recall this period was when Cover Oregon became a problem in the public domain and the gubernatorial campaign crowded out the ability to appoint topflight talent.  (Few folks want to take a job they might lose in a few months due to an unforeseen election result.)

The interim Cover Oregon director at the time, Clyde Hamstreet, was critical of the culture at OHA. In 2014, he said:

“The culture and bureaucracy of OHA is a deterrent to fresh, efficient operations.”

Apparently, the organizational culture continues to be an issue.  When the news of Saxton’s removal broke, Rep. Mitch Greenlick said he thought the culture at OHA was part of the problem. From a Portland Business Journal story:

“Their culture, it seems to me, is not dedicated to making sure the most eligible people have access to care, it’s to make sure they have dotted all their i’s and crossed all their t’s,” said Rep. Mitch Greenlick, a Portland Democrat and chair of the House Health Care Committee. “The focus isn’t on getting care to people but on being bureaucratic.”

The buck stops at the top, to be sure.  But, not even one of the OHA’s most vocal opponents, Jeff Heatherington, CEO of FamilyCare, believed the fault was all Saxton’s. Here’s his quote from the same PBJ story.

“I really don’t celebrate outcomes like this,” said Heatherington, sounding a conciliatory tone after once accusing OHA of acting like a bully. “She did what she could while in the agency, and I don’t think she was responsible for everything to begin with, so I’m not going to do any beating up.”

No one thinks all of the problems at the OHA were created by Saxton.  The problem is, however, that “culture beats strategy every time,” as many organizational management gurus will tell you.

At state agencies, where the staff often remain through multiple leadership changes, it is often much harder to change organizational culture than in the private sector.

It appears that Saxton’s turnaround strategy at the OHA may not have been enough to overcome the OHA culture.

 

3. Leadership turnover stifles any organization, but the OHA has been particularly sensitive to turnover in recent years.

An organization needs steady leadership to be successful.  Both at the OHA, and around it with the change in the Office of the Governor, the OHA has seen significant turnover in recent years.  Since 2013, the OHA has had four leaders, two interim and two permanent. Pat Allen is now the fifth.

Take a look at the recent changes at the top of the OHA.

  • Dr. Jim Rickards, Chief Medical Officer
  • Lori Coyner, Director of Medicaid
  • Lynne Saxton, Director
  • Dr. Varsha Chauhan, Chief Health Systems Officer

These are some of the most important positions at the organization, all of which now have vacancies or temporary “interim” hires in place.  The OHA cannot be an effective operation on behalf of the legislature that funds it, the beneficiaries it serves, or the organizations with which it partners unless it can build steady leadership across the organization.

Given the looming gubernatorial election in 2018, this task becomes even more difficult.  As I said above, finding good folks is hard. Getting them to join your team when an election result could lead to their untimely termination is extraordinarily hard.

 

4. Patrick Allen, the OHA’s interim director, is respected for effective agency leadership at DCBS. Is that enough? 

I haven’t heard anyone say a bad word about Patrick Allen. Some have questioned his depth of knowledge on the CCO model, a reasonable question that he will have to address at some point. His experience in health care comes primarily, I believe, from overseeing the regulation of commercial health plans.

But, no one has said they think he is out of his depth or isn’t up for the task.  That’s very good news for everyone in Oregon Medicaid.

Notably, when questions about Moda’s financial position arose in January, 2016, and they were forced by Allen’s agency at the State of Oregon into a supervised/oversight status, the same event happened in Alaska.

Observers close to the matter commented to me that the State of Alaska damaged Moda considerably in their reactionary approach to the very sensitive action.

By comparison, Allen’s agency was much more measured, reasoned, and careful in its dealings with Moda.  It’s that sort of thoughtful, professional approach as a regulator that has earned Allen high marks.

But is that enough?

Running the agency, leading the turnaround, those are mission critical items.  They were elevated as such by Gov. Brown in her letter appointing Allen.

“Your highest priority from day one should be restoring trust with the public, legislators, stakeholders, and most importantly the clients the Oregon Health Authority serves… I also expect you to immediately evaluate OHA’s leadership team based on their ability to fulfill the agency’s critical mission responsibly and make personnel changes as you see fit.”

But this position is going to take some vision for the future of Oregon Medicaid, too. Patrick Allen will likely lead OHA through the CCO procurement in 2018.  In response to my comments, Allen told me:

“I’m committed, as is the governor, to the CCO model as the only realistic way to deliver Oregonians improved health through quality care we can afford.”

The 2018 procurement for CCOs is the biggest thing to happen to Oregon Medicaid since 2012 and the last procurement.  What that looks like, whether that moves to a CCO 2.0 model, or shifts to a more traditional MCO approach open to national plans, is yet to be determined.

 

Bottom Line:  Stakeholders are nervous about the future of Oregon Medicaid.  Saxton’s departure exacerbates that nervousness.  Moreover, the OHA may need visionary leadership even more than other agencies due to its organizational culture. Patrick Allen is a respected and capable leader.  The task before him at the OHA is a big, complex, and sensitive.  He has his work cut out for him.