Gov. Brown signs cost growth target bill

House Bill 2081, on the modification of the Health Care Cost Target program, was signed into law by Oregon Governor Brown last week. 

 

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This bill will create “accountability mechanisms” for providers and insurers whose overall costs remain high. Insurance and provider groups will receive civil penalties if they fail to report cost growth data to ensure transparency between themselves and Oregon Health Authority (OHA). 

House Bill 2081 attempts to strengthen the Health Care Cost Growth Benchmark program first created by Senate Bill 889. The program launched in February 2021. 

The cost growth target is at 3.4% for the first 5 year going down to 3% in the next 5 years. Right now, the growth rate is at 6.4%. According to Jeremy Vandehey, the director of the health policy and analytics division at OHA, the target could save $16 billion in health care expenses over the next 6 years. 

Vandehey said this bill is intended to save costs for consumers from increased rises in health care expenditures. 

“With the passage of HB 2081, Oregon’s cost growth target work begins in earnest and we start the first year of scrutinizing health care costs at a granular level. We now have everything we need – the data, the tools, and the accountability mechanisms  – to ensure that costs do not continue to grow faster than family or business budgets. We will be able to shine a light on what is driving cost increases across the industry starting this year and then take action to rein them in.”

Becky Hultberg, president and CEO of the Oregon Association of Hospitals and Health Systems (OAHHS), originally expressed some reservations with the specifics of the bill. However, she continues to show support upon the bill’s passage. 

“This bill is a step in the right direction for consumers as the health care system works to contain costs and improve quality. We should focus on what’s best for the patient and prioritize public policy that encourages partnerships to achieve this goal. As we move forward, leadership will be required to ensure that our public policy decisions are aligned around the framework laid out in this bill and the overall cost growth target. This work is a testament to what is possible through collaborative health care leadership in Oregon.”