Move over, Massachusetts? Oregon paves way on reform

Recently signed reform law will establish 'coordinated care organizations'

Oregon Gov. John Kitzhaber (D) last week signed a health reform law that will establish Medicaid "coordinated care organizations" (CCOs), an approach some experts say could serve as a national model.

Oregon's plan

Under the new law, each CCO will adopt the patient-centered medical home model and be charged with caring for Medicaid patients in a given area. Using a global Medicaid budget, each CCO will determine the best way to provide comprehensive health care for their patients—including dental and mental health care—with a particular focus on patients with chronic conditions, addiction problems, and mental illnesses.

For example, one coordinated care project in central Oregon reduced ED visits by 49% in six months by creating care plans, assigning patients case managers and embedding mental health providers.

If Oregon's plan receives federal approval, the CCOs will begin to operate as early as July 1. Ultimately, supporters hope to expand the CCO model to include government workers and privately insured residents.

Scaling up the plan

According to Gov. Kitzhaber's office, the model is projected to save the state about $1 billion across three years. If implemented nationwide, state officials estimate that the CCO approach would reduce federal spending by more than $1.5 trillion over the next decade—$300 billion more than the debt "Super Committee" attempted to save over the same time frame.

"There are several states thinking about this kind of approach," said Cindy Mann, deputy administrator at CMS. "This is definitely a time when everybody can be learning from each other."

However, critics note that other managed care projects have failed to produce significant savings. A January Congressional Budget Office report found that 34 programs on average had little or no effect on hospital admissions or Medicare spending.

Meanwhile, the AP/Washington Post notes that the success of the program hinges on whether it can expand beyond Medicaid, and whether other states can adapt the model to accommodate different cultural and political environments (Cooper, AP/Washington Post, 3/6; Evans, Modern Healthcare, 3/5 [subscription required]; Cooper, AP/Philadelphia Inquirer, 3/4).

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