Q&A: Jeremy Vandehey discusses expanding coverage and lowering cost of health care in Oregon

Jeremy Vandehey is the Director of the Health Policy and Analytics Division at the Oregon Health Authority (OHA). Mr. Vandehey spoke with State of Reform about the most pressing pieces of legislation moving forward and the importance of expanding coverage and equity within the health system in Oregon. 

Patrick Jones: Over the past year during the pandemic, how has your work at the health policy and analytics division changed? What are you spending the majority of your mental energy on, specifically on your division?

Jeremy Vandehey: I think the challenge has been the immediate COVID response and the need to support the overall agency as we’ve been leading the response effort statewide. And at the same time, issues related to financial sustainability within the health system, health equity, health care costs and coverage are more critical now than ever before. The pandemic has really shown how important it is for people to have health insurance and for healthcare to be affordable and accessible. It’s showing how many inequities there are within the system, and how critical it is that we center our work in equity going forward. So I think this last year has been a balance of needing to respond to the pandemic, but recognize that on the other end of the pandemic, we’re going to be in a recession, we’re going to be in a tighter state budget situation, and we need to really be focused on building a health system that focuses on health equity that’s affordable and gets everybody health insurance.


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PJ: What bills are working their way through the legislature that are priorities to you in the House? 

JV: So you’ll hear a common theme from me around costs and coverage. Right now, I think for the same reasons that I just highlighted, we have seen just how important it is that everybody has access to the health system. There’s a number of priority issues that we’ve been working on this session. First, House Bill 2081, which would create an accountability mechanism for Oregon’s new statewide health care cost target program. That program will create a target for the rate of growth of healthcare costs year over a year. In essence, it’s a per capita budget target for healthcare spending. That bill setting up the program bassed with broad bipartisan support in 2019. We’ve had a committee that’s been working really hard to develop a set of consensus recommendations for how we’ll build the program out as well as recommendations for accountability. What do we do if an insurer or provider isn’t meeting the cost growth target? And what’s the accountability mechanism? So HB 2081 is the bill that includes the committee’s recommendations.

PJ: What is the goal for these recommendations of accountability?

The overall concept is that we’ll lead with transparency. We hope that transparency on performance and cost will be enough to motivate folks to keep costs down. If that doesn’t work, then the next step will be performance improvement plans, and then after that would be a financial penalty. So that bill is up for a work session on Tuesday (3/9). A spin off of that work has been to really advance Value Based Payment in the state and more aggressively move from fee-for-service to payments to payments that are tied to quality and outcomes and promote financial sustainability. We had introduced the bill originally but have switched gears and are really focused on getting the major payers and providers in the state to sign voluntary compacts to commit to some aggressive targets over the next couple of years. We’ve made a ton of progress in the last couple of weeks on that. So, right now we’re not pursuing our bill, but we’ve been actively engaged with the legislature and other stakeholders. We’ve got all the major insurers signed on in the state, the largest CCOs, the hospital association and several of their larger members along with the Oregon Medical Association. 

PJ: What bills are priorities to you in the Senate?

JV: We also have a bill, Senate Bill 65, that will move the insurance marketplace from the Department of Consumer Business Services over to OHA. Right now, OHA purchases healthcare for about 1.5 million Oregonians between Medicaid and the two public employee programs. The idea was to align the state’s purchasing power to drive value, to reform the system and get higher quality and more affordable insurance. The idea is to bring the marketplace over next, and that would include another 150,000 individuals. That way, across Medicaid, public employee programs and the marketplace, we’ll have a consistent set of goals and expectations around containing costs and maintaining quality, access and equity. 

PJ: How can the legislature help to cut health insurance costs?

JV: We have been pretty interested and engaged with the legislature around consolidation within the health system. Our concern is that the financial disruption that COVID has caused could put a lot of small providers at risk of being acquired by large organizations. Not to say that those transactions are all bad, but we have seen in a lot of places in the country where the healthcare system is consolidated and costs have gone up and quality has not gone up. In some places, it’s even gone down. So, we’ve been engaging with the legislature around a process where before a merger or acquisition goes forward, there’s an opportunity to hit pause and have transparency so the community knows whether there might be a big change to their local health care system and allow them to weigh in.

PJ: How about in the area of expanding coverage for Oregonians?

JV: On the coverage side, we really see there being a couple of key strategies. We’ve made huge gains over the last decade to expand coverage. We were hovering right around 85% insured, meaning about 15% of the state was uninsured. Before the pandemic, we we’re up to about 94% of the state insured and about 6% uninsured and only half of that was uninsured the whole year. The legislature has really been focused on trying to figure out how to keep filling in the cracks for those who don’t have insurance and expanding until we get to universal coverage. They’ve made a couple of big investments in the last several years that expanded coverage to Pacific Islanders who had been left out of the ACA and low income children who had been left out of the ACA due to documentation of their immigration status. So, the governor has proposed two new strategies to continue to build towards universal coverage. The first is Cover All People. That will expand middle Medicaid coverage to low income adults who aren’t eligible for Medicaid within the ACA, as well as an investment in her budget for us to develop a public option proposal and bring that back to the legislature. I see those as two complementary strategies to Cover All People around expanding coverage to folks who are low income but have been left out. The public option is really about building a more affordable option for folks who might have insurance but are at risk for losing it, because it’s just too expensive.

PJ: Where are those two bills at right now? 

JV: They’re both being worked on in the House. 

PJ: What are some of the things we should be specifically watching from what you just said?

JV: I mean, it really comes down to three overarching goals. First, we have to focus the health system on driving health equity and eliminate inequities. We have to do that in all of our work going forward. I also think that it’s really going to come down to cost and coverage. We’ve done a lot of great work to transform parts of the health system, but we have to get our arms around the rate of growth of costs. So, I think the statewide cost growth target program is a foundational element of that and we expect a lot of work will spin off of it that it will be our anchor going forward on continuing new strategies that really helped us contain costs in the long term. It’s going to be the forum at which we bring stakeholders together across all the insurance markets, the healthcare systems, and on an annual basis, have a public hearing and an annual report on what the cost drivers are, where we’re succeeding and where the challenges are. So we see that as a fundamental shift in health policy. It’s going to take us from focusing on state health care programs to focusing on the entire healthcare system, and especially trying to get costs down in the private markets, where most people still get their insurance. Then I think after that, it’s continuing to build to universal coverage. We’re a state that has been on path for a long time to try to get everybody access to affordable health care and we’ve tried a lot of different strategies. We’ve come a long way, and I think we can see that there’s a light down the tunnel. I think we’ve got a federal administration now that we can work with to try to keep getting towards 100% coverage.

This interview has been edited for length and clarity