February 9, 2017

Quarterly legislative report on Oregon’s health system transformation

Oregon’s health system transformation continues to pay dividends for Oregonians. Even as uncertainty about health care continues at the federal level, Oregon is seeing improved health outcomes, increased health coverage and lower costs to the state.

That's the message of the quarterly legislative report recently released by the Oregon Health Authority. The report provides the Legislature and public with results and data on the progress of Oregon’s health transformation and the vital health care coverage for children and families struggling to make ends meet, including low-income working families. 

The Oregon Health Plan (OHP) provides needed health coverage to approximately 1 million people, or more than one in four Oregonians and more than one in three residents in many rural counties. It is the largest health plan in the state and the engine for the health system transformation that has improved health outcomes and saved the federal and state governments $1.4 billion since 2012.

The quarterly report highlights that in September 2016 more than 378,000 Oregonians and one in three Medicaid recipients were receiving health care coverage through new income eligibility criteria allowed by the Affordable Care Act (ACA). The report also reveals that statewide, nearly 40 percent of working-age OHP members enrolled in a coordinated care organization (CCO) are employed and 8 percent are working more than full time.

CCOs maintain financial health as operating margins begin to stabilize

The increased membership resulting from the ACA expansion generally led to an increase in both the net assets and restricted reserves for Oregon’s CCOs. On a statewide basis, CCO operating and total margins have been trending downward from their peak in 2014. This stabilization is to be expected and the report includes financial data for Oregon’s 16 CCOs for 2014, 2015 and the first two quarters of 2016. 

The quarterly legislative report also highlights financial pressures facing the Medicaid program and CCOs, including the impact on the OHP budget of increasing pharmacy costs. In 2015 pharmacy expenditures reached $674 million compared to $533 million in 2014. Hepatitis C drug expenditures continue to significantly increase, with $38 million spent on Hepatitis C drugs in 2015 compared to $16.6 million in 2014.

The 2016 mid-year CCO metrics report also was released recently. It lays out the progress of Oregon’s CCOs on quality measures as of June 2016. Measuring quality and access to care are key to moving health system transformation forward, to ensure high-quality care for Oregon Health Plan members.

OHA releases community benefit report on Oregon hospital spending

Oregon hospitals provided $1.9 billion in community benefits in fiscal 2015, a 1 percent increase from the previous year, according to a new Community Benefit Report from the Oregon Health Authority (OHA).

 Whether paying for research, sponsoring local Little League teams or building new facilities, hospitals in Oregon spend money each year to benefit their communities. Since 2007 the Oregon Health Authority has been tasked with gathering and publishing data on how Oregon hospitals are providing their community benefit.

Key information in the report released today includes:

• The majority of the $1.9 billion in community benefits in fiscal year 2015 came from large urban hospitals, which account for $1.7 billion.
• $67 million was spent on direct community improvements and benefits (e.g., community health improvement, in-kind cash, and community building) which accounts for 4 percent of total community benefit.
• Over 70 percent ($1.3 billion) of total community benefit was provided through unreimbursed costs for Medicaid and Medicare.
• Charity care has dropped 37 percent since 2014 to $157 million.

Oregon’s 60 acute care hospitals are subject to the reporting requirements for community benefit. However, McKenzie-Willamette Medical Center in Springfield and Willamette Valley Medical Center in McMinnville are for-profit hospitals and therefore have no obligation to provide community benefit because they are subject to property and income taxes.

Hospitals report the data used to compile the annual community benefit document directly to OHA.

Legislative update

Welcome to the 2017 legislative session! As we move through the session, we will include regular legislative updates in the Oregon Health Update to keep our partners up to speed with information.  

Health care and closing the state’s budget gap will be major areas of focus for legislators during this session.

• First bills move out of committee: In early action, HB 2302, which allows Oregon State Hospital staff to sign people up for benefits in preparation for transition back to the community, was unanimously voted out of committee and is headed to the House floor.
• Tobacco prevention: Sen. Elizabeth Steiner Hayward held a press conference last week focused on raising the smoking age to 21 (coverage of the event here).
  
• Coming up: OHA’s budget presentations at the Ways and Means Subcommittee on Human Services started this week and will continue throughout the month.