On Health Care Reform, Oregon Governor Says House GOP Budget ‘Misses The Target By A Wide Sea Mile’

Oregon Governor John Kitzhaber

Oregon Gov. John Kitzhaber presented a talk to the Center for American Progress today, outlining the reforms his state is attempting in health care. The state is setting up an exchange in accordance with Obamacare, but also using its Medicaid program and its health benefits for state employees as a launching pad to move providers away from the traditional fee-for-service model. What would replace it is an approach utilizing Coordinated Care Organizations — local, community-based hubs through which multiple providers can stay on the same page about a patient’s care — that emphasize coordination, preventative care, and general community health.

In response to a question from ThinkProgress, Kitzhaber also went into greater detail about how his state’s reforms are functioning in the context of Obamacare, how it would fare under the changes proposed in the House GOP budget passed earlier this year, and how everything depends on shifting health care delivery away from fee-for-service:

KITZHABER: We essentially were designing this thing independent of the Affordable Care Act, but there’s no question that there are huge similarities between the Coordinated Care Organizations and the Affordable Care Act…

The alternative — whether its the Medicaid approach or the Ryan Medicare approach — I think misses the target by a long sea mile. First of all, it’s a global budget. If you have more people coming into the system because of federal policies that increase unemployment, you actually get less money per person. So you penalize people who have lost their jobs and need health care through that capped approach. The per member, per year increase gives you the same amount per person and that grows at a fixed rate.

Secondly, neither of those things deal with the fundamental problem, which is the delivery system. They’re just unique, novel, and perhaps politically palatable ways to pay for the same dysfunctional system. So it doesn’t matter if you have a single-payer system, a vouchers system, or the private commercial insurance system, if you’re paying for the wrong delivery model you’re going to get the same results.

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Oregon’s move to coordinated care and delivery system reform is mirrored at the national level by the pilot programs passed under Obamacare, through the law’s reimbursement reforms and its creation of the Independent Payment Advisory Board for Medicare. Like Oregon’s use of Medicaid, Obamacare will use IPAB and Medicare’s immense leverage in the health care market to drive the delivery of health care away from the fee-for-service model.

There’s already evidence that providers and hospitals are reforming in anticipation of this new pressure. However, Vice Presidential Candidate Paul Ryan has routinely dismissed IPAB as “fifteen unelected bureaucrats,” and the budget he wrote with his fellow House Republicans would eliminate these reforms wholesale. Instead, they would simply slash health care spending, likely at severe cost to seniors and other vulnerable Americans, while trusting the private insurance markets to find their own way on delivery system reform. Beyond raw ideology, there’s no clear reason why this approach is preferable to using Medicare’s immense bargaining leverage to help the process along.