For those who follow such things, this post is a slightly longer and more pointed version of one that we recently did for the Cascade Policy Institute.
Here’s a question for you. If you take quietly take thousands of Oregonians hostage and then release with great fanfare, does that make you a kidnapper or hero? The answer, of course, depends upon whether anyone remembers that you kidnapped them in the first place. This happens to be exactly the scenario posed by the Oregon Health Plan’s newest innovation, the “Coordinated Care Organization”, or CCO.
CCOs are in the news because they now appear to be the state’s only strategy for saving the Oregon Health Plan (OHP). According to a recent article in The Oregonian, they are “poised to transform” the healthcare. The CCO approach is said to “offer a glimpse of the future for the Oregon Health Plan’s 600,000 low-income and disabled people on Medicaid and Medicare.” Indeed it had better. As described in the article,
“The state budget assumes the transformed health plan will be up and running next summer — quickly enough to save $249 million in Medicaid costs in the second year of the 2011-13 biennium. If it doesn’t, the state will have to find money to fill the hole or cut Medicaid payments, already down 11 percent this year.”
But before we get too carried away with praising the solution, it’s worth recalling just how we got into this situation, who got us there, and exactly what, if anything, is “new” about CCOs.
It’s no secret that Medicaid in Oregon has been underfunded for decades. As documented by The Lund Report, physicians take a large financial loss on every patient they see, and that was before a double-digit reduction in reimbursement took effect this year. Not surprisingly, this has forced many clinicians to leave the program in droves:
“Reimbursements to managed care plans have increased just 6 percent in 10 years. Physician payments are set by the plans. Fee for service rates set by the state have increased slightly more. So physicians are already absorbing losses whenever they take such a patient, she said.
‘We’re already in a situation, depending on your contract, where something like 60% or less of a doctor’s overhead is covered,’ said Boyd-Flynn. ‘An additional 19% cut on top of that is going to create a problem with access.’
Roughly a quarter of all primary care physicians in Oregon, and about 18% overall, refuse to accept additional Medicaid patients mainly due to low reimbursements, according to the most recent physician workforce study published in 2009.”
One predictable result is that large numbers of OHP patients headed to hospital emergency rooms for care. Indeed, the Oregonian article began by profiling one such patient who is now a CCO patient and advisor to the Governor’s CCO program:
“Wracked by diabetes, hypertension, asthma, spinal disease, allergies, depression and other ills, Amy Anderson felt she was near death when she found the Mid-County Health Center in 2007.
She had lost her job and health care a year earlier and had been getting most of her health care in hospital emergency rooms. But at Mid-County in Southeast Portland, she was assigned her own team of health care providers that she saw at every visit. They got to know her; she grew comfortable with them.
‘Any time I called, someone was there,’ says Anderson, 56. ‘I started to believe I was going to get good care.’”
There’s no doubt that that’s great, but how does the CCO do it? And what is a CCO anyway?
In basic terms, CCO is a medical clinic that has enough people, and a big enough budget, to do what any medical clinic would do if it could afford to do so: take care of its patients. Here is the Oregonian’s description:
“Each Mid-County clinic team has a doctor and family nurse practitioner, each with a clinical medical assistant; a registered nurse; a team clerical assistant; and a third clinical medical assistant to track appointments, preventative measures, prescriptions and other information for team patients.
The team also has access to psychiatric nurse practitioners and social workers at the clinic. Team members work together in the same room and huddle twice a day…
When a patient like Anderson shows up, the team knows her health history, her medicines she’s taking and what tests she needs. Sometimes the team will call her in for a test. She can call the team directly and often, if needed, get in to see someone on the same day.”
All of this certainly makes sense, and doctors normally do most or all of those things for their private patients. So why don’t all doctors do this for their Medicaid patients? The answer, of course, is that they can’t. Medicaid doesn’t pay them enough to cover their basic overhead, let alone retain whole teams of social workers and administrative personnel. If it did, they wouldn’t have to have stopped seeing Medicaid patients in the first place. Moreover, Medicaid doesn’t pay them for many of these activities (such as coordinating with other providers), at all. And to add insult to injury, Medicaid is one of the worst of all insurers to accommodate in terms of administrative overhead. It’s not our healthcare providers who have failed these patients; it’s the insurance system that the government itself created.
All of which brings us back to the promised transformation of the Oregon Health Plan. Having essentially created the problem of underinsured patients who receive all of their care in emergency rooms, how can CCOs now succeed where the rest of OHP has failed?
The answer is money. In medical and even social terms, CCOs are nothing particularly innovative or revolutionary; they’re just clinics with more resources than their private counterparts. The real difference is that the state and federal governments are presumably making a commitment to fund them in a responsible manner. If not, they’ll be held hostage to the same unsustainable business model that has characterized the OHP for the past decade. Patients will fall through the cracks, and ER visits will once again be the norm, and the next transformation will have to come up with yet another new catch phrase.
In that case one really hopes that Oregon voters remember who kidnapped an expectation of reasonable Medicaid reimbursement in the first place.
This case also illustrates one of the real problems with having the government decide what “works” and what doesn’t by simply manipulating payment policy: what are we comparing? OHP hasn’t formally announced how the CCO program will be evaluated, but any comparison to the underfunded status quo is clearly going to be inappropriate. Nearly any fully-funded program is going to look good compared to the current train wreck. A skeptic might imagine that it’s even possible to rig the financing of such a program to merely produce a desired result: e.g., that the clinical results of an adequately-funded ACO are clearly better than those of private practitioners who are being forced to subsidize the care of these same patients with the payments they received from private insurers.
Who’d have imagined it?