1. Oregon Health Care Reform "Letting Go of the Rope"
Timothy L Keenen, MD
Orthopedic Spine Surgeon
Tualatin, OR
AAOS Fall Meeting
October 20, 2012
Philadelphia, PA

2. Fee for Service US Health Care Spending 18 % of GDP 25% by 2037
25% of Federal Spending
40% by 2037
Accountable Care Organization
(ACO)
Pay for Performance
Global Payments
Patient Centered Medical Homes
(PCMH)
Affordable Care Act
(ACA)
Bundled Payments
Fee for Service

3. Medicaid
Medicare
Commercial

4. 3,800,000
2,000,000
40% D
30% R
25/5 %

5. public employees / teachers
2012
3,800,000
600,000 Medicaid
300,000
public employees / teachers
25% state funding for health care
16 % budget
Oregon Health Plan
1993 waiver from Bill Clinton
2,900,000
240,000 medicaid oregonians

6. (President of State Senate 1985-1993)
John Kitzhaber, MD
State Legislator
(President of State Senate )
Governor
Archimedes Movement 2006
Governor 2011-present

7. US health care assumes that the public sector and private employers will continue to fund the medical inflation rate faster than CPI and that this will continue to be funded without evidence of positive outcomes.
Gov. John Kitzhaber

8. Three strategies
1. Decrease provider reimbursement
2. Decrease number of patients covered
3. Decrease patient benefits

9. The new rope we are grabbing onto…..
Coordinated Care Organizaion
CCO
Local Flexibility
Cost / Outcome Management
“Outside” fee for service
Global Payment
Bundled Payment
Pay for Performance
“Outside” hospital and doctor office
Flexibility
Technology

10. 2007 Oregon Health Fund Board (OHFB) 2009 Oregon Health Authority
(OHA)
Oregon Health Policy Board
(OHPB)

11. State Health Insurance Exchange
Oregon SB 99
(June 2011)
State Health Insurance Exchange
Market place for apples to apples comparisons for insurance
Central elements to move from Medicaid into the private market

12. Coordinated Care Organizations:
3650 HB
June 2011
Coordinated Care Organizations
(CCO)
A service integration, care coordination, focus on wellness, prevention and community based management of chronic conditions  medical care.
Population health rather than simply the delivery of medical care
Risk adjusted global budget that grows at a fixed rate
Accountability for performance standards around access, around clinical outcomes, and around metrics for improving population health

13. SB 1580 February 2012 CCO adopted as a plan
Senate vote (16D 14R)
House 53-7 vote  (30D  30R)
CCO adopted as a plan
Established application / certification process
Tort Reform deferred to 2013

14. Differences Commonalities ACO Accountable Care Organization
PCMH Patient Centered Medical Home
CCO Coordinated Care Organization
Commonalities
Reduce incentive for providers to earn more by treating more
Improve coordination / integration of care
Focus on use of Information Technology
Differences

15. $1.9 billion dollars from HHS over 5 years
May 1, 2012
Federal Waiver
Payment:
$1.9 billion dollars from HHS over 5 years
Federal requirement:
2% decrease in the Medicaid per member inflation rate trend by the end of the second year
(down to 3.5%)
Savings:
$ 1.9 billion over 5 years
$11 billion over 10 years

16. The grand bargain was they give us the flexibility, they give us $1
The grand bargain was they give us the flexibility, they give us $1.9 billion, we reduce the Medicaid cost trend by 2 percent points per member by the end of the second year and improve health outcomes. That’s the grand bargain.

17. Health Evidence Review Commission (HERC)
Health Technology Assessment Subcommittee

18. SK: How will the administration measure what counts as higher quality care? How do you safeguard against providers skimping on care?
JK: There are metrics we’re developing with [the Center for Medicare Services] about patient outcomes and population health metrics. So this is clearly unlike an old HMO, which could save costs by skimping on care.

19. What can I do? Reimbursement Fee for Service Global Payment
Bundled Payment
Contract ?
Strategic Pathway ?
RCT based
Patient Registry based
Treatment Outcome Measure?
Pay for performance