Why It Matters
On a recent IHI Leadership Alliance webinar, John Kitzhaber, MD, former governor of Oregon, suggested that the change in administration offers an opportunity to reframe the debate to address a problem that both parties care about — rising costs.
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Former Oregon Governor: Health Care Leaders Must Lead the Debate on Health Reform

By Stephanie Garry Garfunkel | Tuesday, January 24, 2017
health-care-costs

Photo Credit: Pictures of Money/CC BY 2.0

With a new Congress and President sworn in, many health care leaders are wondering what’s next for health care reform and the transition from volume to value.

On a recent IHI Leadership Alliance webinar, John Kitzhaber, MD, former governor of Oregon, suggested that the change in administration offers an opportunity to reframe the debate to address a problem that both parties care about — rising costs. Oregon has pioneered both health insurance reform and delivery reform, expanding access to health care while also implementing measures to help control costs.

So far, policymakers have led the national conversation, focused primarily on expanding access to health insurance and the existing, costly health care system. But beyond payment reform, the problem of cost can only be tackled by changing the health delivery system itself — and that’s where health care leaders can play a role, Kitzhaber said.

“One reason I think costs are hard to control is we keep funding [health care],” Kitzhaber said.  “As long as we keep paying for the status quo, there is absolutely no incentive for changing it.”

How Oregon Reformed Health Care

Kitzhaber shared the story of Oregon’s efforts to control costs, expand access to Medicaid, and spark innovation as part of the “Behind the Boardroom” webinar series, one of the benefits of participation in the IHI Leadership Alliance, a dynamic collaboration of health care executives committed to advancing the Triple Aim — better experience of care, improved population health, and lowered costs.

A core component of Oregon’s efforts involved the creation of coordinated care organizations (CCOs), which bring health plans and providers together to take on responsibility for quality improvement and cost containment goals. The Oregon Legislature created CCOs in 2011, when the state faced a significant budget shortfall as a result of the recession that threatened access for patients and reimbursement for providers.

CCOs required health systems that serve Medicaid patients to adopt a coordinated care model with budgets that grow at fixed rates. The parameters to define CCOs were purposefully broad — they were required to offer integrated services, reduce disparities, and engage community partners, but left lots of room for innovation at the local level. They’re also responsible for the health outcomes of the population they serve.

“Here’s the thing,” Kitzhaber said on the webinar. “Ceding control to local decision makers is essential because it’s here at the local level that the real creativity and innovation takes place.”

A State Mandate for Local Innovation

Dr. David Labby, Health Strategy Advisor at Health Share Oregon, one of Oregon’s CCOs, shared his perspective from the delivery system on the call.

He said communities and business leaders were already motivated to control costs before the state mandated the formation of CCOs. Years before, business and community leaders had formed the Oregon Health Leadership Council, which worked on simplifying administration and evidence-based practice. But at the same time, the top-down mandate created an environment for innovation in health care delivery.

“The whole CCO movement was not a choice,” Labby said. “If you were going to do Medicaid, you were going to be part of a CCO. It changed the nature of the conversation from, ‘What might we do?’ to, ‘What do we have to do?’”

Labby said his organization has focused on improving outcomes of patients sometimes referred to as “high-utilizers.” In its work, Health Share Oregon has learned that medicine alone, no matter how well coordinated, is not enough to improve outcomes at lower costs.

He described the population using the most Medicaid services: Many have had a traumatic childhood, struggled in school, wound up in the foster care system, and then in their adult life, likely been in jail. Many struggle with housing and homelessness as well as mental health conditions and physical illness. Health Share has worked on several initiatives to help this population, including improving care transitions, increasing care management, and addressing the social determinants of health.

“The health care delivery system isn’t going to solve the problems of this really challenged population,” Labby said, pointing to other key stakeholders, including housing providers, schools, and the criminal justice system. “We’re going to have partnerships.”

For more information on redesigning care to improve health outcomes and control costs, visit the Playbook: Better Care for People with Complex Needs. For more information on the “Behind the Boardroom” webinar series and other Leadership Alliance benefits, visit the Alliance Overview page.

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