Ted's Agenda for Health Care - “Everything That Works”

We can’t afford to wait for the federal government to solve our health care crisis. Rapidly rising costs are squeezing working families and senior citizens, penalizing good employers and leaving more and more children and working adults without access to needed care.

Most Oregonians, like most Americans, earn health care coverage from their jobs – either their own jobs or the jobs of family members. For these working families and their employers, holding on to health insurance has become a continual challenge as rising costs squeeze family budgets and penalize businesses trying to maintain benefits for their employees.

As costs rise, the ranks of the uninsured grow larger every year, both in Oregon and throughout the U.S. Today more than 600,000 Oregonians lack health insurance – one of every six persons in our state. More than half of these are working adults. More than 117,000 are children.

Even for those with insurance, the bills for care are often as incomprehensible as they are unaffordable. We confront the rising costs of health care on every pharmacy shelf, in every doctor’s bill and in every computer printout that follows a stay in a hospital. Costs seem to be rising without reason.

These escalating costs are borne by all of us as consumers and taxpayers. Bills that go unpaid and the costs of providing emergency care to the uninsured are passed along to employers and working families who pay higher insurance premiums, co-pays and deductibles to make up the difference. Oregon families who have private health insurance pay an extra $94 a month in premiums due to the cost of care for the uninsured. And our state budget has been stretched thin by the cost of providing care to the disabled, the unemployed and the working poor.

Still, the uninsured pay the highest price of all. They are sicker, get less care when they need it and typically seek expensive crisis care in emergency rooms rather than more cost-efficient preventive care in a doctor’s office. They are less likely to survive a serious illness than those who have insurance and more likely to face personal bankruptcies due to unpaid medical bills.

We have to reverse these trends before health insurance becomes a perk for the wealthy – and middle class families have to pay more for their health insurance than they do for their housing and other necessities.

Unfortunately, the federal government hasn’t done anything to reverse these trends in recent years. And many of their actions have made things worse for working families. Health savings accounts have shifted more costs to middle-income families with health insurance and have done nothing to reduce costs for them as consumers. Cutbacks in Medicaid at the federal level also make it harder for states to sustain coverage for the disabled and the working poor.

Governor Kulongoski is tackling this crisis with a three-part plan – to reduce costs, expand coverage and improve care.

There are ways to break the vicious circle of rising costs and declining coverage here in Oregon. What we pay for health care and what we get for what we pay are the levers for solving our health care crisis. By containing costs, we can help employers expand and sustain their health insurance offerings and stretch our tax dollars farther to cover those for whom job-based health insurance is not an option. If we can reduce costs, expand coverage and get better health care for our money, we can reverse the trends that are threatening the health and economic well-being of our working families, our employers and our communities.

Governor Ted Kulongoski is moving forward with a plan to tackle our health care crisis on all three of these fronts:

  • To reduce costs at their source, including a public-private effort to negotiate lower prescription drug prices from the big drug companies and make the prices we and our employers pay for health care services more clear, fair and transparent to us as consumers;
  • To expand coverage for the uninsured, beginning with an innovative plan to offer affordable health care options for all children in Oregon and exploring new ways to help employers afford health insurance for their employees; and,
  • To get better care for the money we pay, by encouraging more prevention and early detection of illnesses and by recruiting and training more health professionals.

Here in more detail are more than 30 separate actions the Governor has taken or is preparing to take to reduce costs, expand coverage and get better care for our health care dollars.

(1)Reduce Costs at Every Point in Our Health Care System Where Unfair Prices Are Forced on Consumers

Governor Kulongoski is working with public and private sector partners to control health care costs at their source, where drug companies are jacking up prices for medicines, where providers are charging different amounts to different patients for the same procedures, and where insurance companies often pass these costs on to working families and their employers. His goal is to get the kind of medical care Oregonians deserve at more affordable prices.

Negotiate fair prices for prescription drugs. Prescription drugs account for as much as 20% of all costs in some health care plans, and their prices keep rising far beyond what is justified by the cost of research and production. Governor Kulongoski has been challenging the big drug companies to give us fair prices for their products.

He worked with the legislature to establish the Oregon Prescription Drug Program (OPDP) - Oregon’s innovative pooled purchasing program for prescription drugs. This program has reduced costs for low-income seniors by up to 60 percent and delivered thousands of dollars in savings per month for public employer groups, such as school districts and local governments.

He is campaigning to pass Ballot Measure 44. Efforts to expand the state’s pooled purchasing program were blocked in the legislature last year by the pharmaceutical lobby. But, this year, AARP helped qualify Measure 44 for the ballot; that measure will open up the Oregon Prescription Drug Program to all Oregonians who do not have insurance coverage for prescription drugs. The Governor supports Measure 44 and is campaigning for its passage.

He initiated a partnership with Washington State to leverage better prices for all participants in the Oregon Prescription Drug Program.

He is working with employers to allow private insurance groups to participate in the state’s pooled purchasing program, thereby gaining more bargaining power with the drug companies and the ability to secure even better prices for prescription drugs. When businesses pay less, employees pay less.

He implemented an enforceable preferred drug list that allowed the state Medicaid program to negotiate with drug manufacturers, just as private insurers do, to reap higher discounts and maximize rebates. Bowing to pressure from the pharmaceutical lobby, the legislature ended that practice, but the Governor wants to re-establish this practice by enacting it into law.

Review health insurers’ rate-setting practices. Governor Kulongoski, who once served as Oregon’s Insurance Commissioner, is working to strengthen the state’s role in reviewing health insurance rate increases.

In response to a bill signed by the Governor last year, the Department of Consumer and Business Services (DCBS) is conducting a review of the finances of all companies that sell health insurance in Oregon, scrutinizing their rates, administrative overhead, surpluses and profitability. The results of this review will reveal whether health insurance rates are being set fairly and competitively in Oregon.

Until DCBS undertook this effort, there had been little oversight of the rates insurance companies demand from employer-sponsored health plans that cover more than 25 employees. But, where oversight is sharpest now, in the individual and small group market, it gets results: One insurer recently announced that it was cutting premiums for individuals by 17% this year.

However, it remains difficult for consumers to know how their insurance dollars are being spent. Governor Kulongoski wants the DCBS review of insurers’ pricing practices to identify reforms that can ensure employers and employees are paying fair premiums that purchase cost-effective care.

Make charges more transparent to consumers. Health care prices should be transparent, easy to access and to understand. When we have clear information about the costs, risks and benefits of care, we can make better decisions for ourselves and our families. We have a right to know what we’re paying for before – not after – we get the bill.

The Governor has made available to Oregonians for the first time previously hard-to-find information about the quality of care at hospitals around the state. That information can now be found at state’s Office of Health Policy and Research website. Also, the Governor has directed the Dept. of Consumer and Business Services to gather information from all major insurers in Oregon on the prices they are charged by Oregon hospitals – to determine the difference between posted prices and actual prices paid by consumers. Their findings are expected to be available in the Spring of 2007.

When combined with a survey of prices provided by hospitals at a new website, called Oregon Price Point, Oregonians will be able to compare the cost of common procedures at hospitals around the state. This kind of information can enable Oregonians to become smarter consumers of health care by choosing the most cost-effective and highest-quality providers of a given service.

The Governor created an innovative state-sponsored website to provide Oregonians with reliable, up-to-date information on the cost, safety and effectiveness of prescription drugs.

He is exploring a plan to curtail the practice of hospitals charging more to the uninsured and underinsured, in conjunction with the creation of a fund to help hospitals provide care to the uninsured and reduce cost-shifting to people with insurance.

Bring more accountability to our health care system. Governor Kulongoski wants to use the resources and authority of the state to bring more accountability to our health care system.

Accountability works. The state’s Public Employees Benefit Board, which oversees health benefits for state employees, has demanded more information from its health care providers and has used that information to make its beneficiaries wiser consumers. PEBB has increased its members’ usage of lower-cost generic drugs from 40% to 63% of all prescription drug purchases.

The Governor has demanded more audits of state government agencies that purchase prescription drugs to detect overcharges and fraud. He will use these audits to direct the state’s prescription drug purchases to companies that offer fair prices and cease doing business with those that don’t.

The Governor has proposed combining the health plans of Oregon’s 198 school districts to reduce health care costs, which will save approximately $20 million a year for our public schools.

Recruit and train more health care professionals. A shortage of health care workers can artificially raise labor costs for health care services, e.g. through the use of overtime to fill understaffed shifts. In order to fill the gap and meet the growing demand for health care professionals, the Governor in 2003 initiated a Healthcare Workforce Initiative to expand opportunities for students to go into health care related professions. This effort will also make it more affordable and attractive for graduates with health care degrees to locate in all parts of the state – not just urban areas.

(2) Expand Coverage for the Uninsured and Underinsured

Governor Kulongoski is leading the effort to offer new health care options for the 600,000 plus Oregonians without health insurance, beginning with the 117,000 children who have no health coverage at all. And he has stepped up to protect low-income seniors from suffering gaps in their Medicare/Medicaid coverage.

Cover all children. Coverage for children is less expensive than coverage for adults, but it is critical to their education and development and a source of great concern for working parents. Governor Kulongoski is working to enroll more children from lower-income households who qualify for existing health plan options sponsored by the state. Children in families of four with income below $3,000 a month are eligible for these plans at no-cost for their parents.

Also, the Governor has announced a major expansion of the state’s support for health insurance for children from middle-income households so that all children in the state have access to health care, no matter what their family situation. The Governor believes universal care for children is the first step to achieve access to care for all Oregonians. (See his Healthy Kids Plan, below.)

He has expanded coverage for 30,000 Oregon children since he took office, by making it easier for children to enroll and stay enrolled in the Oregon Health Plan and the state’s Children’s Health Insurance Program (CHIP). Enrollment in CHIP has increased by 10,000 in the last year alone. There are now 225,000 children in Oregon who receive no-cost and low-cost health insurance from state programs – one of every four children in the state.

Still, there are an estimated 60,000 uninsured children in Oregon who are eligible for the state’s existing health insurance programs but have not yet singed up for them. Governor Kulongoski is working with school administrators, nurses and teachers to reach these children and their parents and encourage them to enroll in the state’s OHP/CHIP health plans. As part of this effort, he is working to simplify the process for determining their eligibility and extend their coverage periods from 6 months to 12, easing the enrollment burden on parents and improving the continuity of care for the enrolled children.

He created the Children’s Group Insurance Plan to expand access to private health insurance coverage for more children in Oregon, making it more affordable for small employers to extend insurance coverage to the children of their employees.

Healthy Kids Plan. Covering more children under existing federal and state policies for OHP/CHIP is an obvious and necessary next step for expanding health care coverage for Oregon children. But it is not enough. The Governor wants to make sure all children in Oregon have access to the health care that they need to thrive, learn and grow into healthy, productive adults.

One of every four children in Oregon is now covered by health insurance provided by the state. Expanding enrollments in existing programs can reach almost one of every three children in the state. But many more children will remain without coverage unless the state provides more affordable options for their health care.

The Governor’s plan does exactly that. It builds on existing resources by expanding school-based health centers and increasing enrollments in OHP/CHIP. And it uses state funds and matching federal funds to provide more affordable group coverage options for all children in the state.

The Governor’s Medicaid Advisory Committee convened hearings and developed recommendations for the design and funding of the Healthy Kids Plan. The details are as follows.

  • All uninsured children up to the age of 19 will be eligible for coverage.
  • Every child insured through the plan will have the same insurance card.
  • Enrollment in the plan will be streamlined and simplified by using existing programs and partnerships with schools and health care providers.
  • Coverage and benefits now offered at no cost by the Oregon Health Plan to children in families with incomes up to 185% of the Federal Poverty Level (FPL) will be expanded to families with incomes up to 200% FPL, which is $40,000 per year for a family of four;
  • Access to a state-sponsored insurance plan with OHP benefits and subsidized premium rates will be offered to children in families up to 350% of FPL, which is $70,000 a year for a family of four;
  • Children in higher income families above 350% FPL will have access to the same OHP plan at competitive premium prices;
  • School-based health centers will be expanded into five new counties and at least five more centers will be added in counties already served by these centers.
  • Mobile dental clinics and cavity prevention treatments for children will be expanded throughout Oregon.

The Healthy Kids Plan will be financed with additional federal funds secured by an increase in the state’s tobacco taxes to match the tobacco tax rates now in effect in Washington State.

Support employers who provide health insurance and encourage more to do so. Most of the 600,000 plus adults without health insurance in Oregon are working full-time or in households headed by a full-time worker. Many lost health insurance when they were laid off or changed jobs, as fewer and fewer jobs now offer affordable health insurance options for working Oregonians. Governor Kulongoski believes that we need to support employers who are providing affordable health insurance for their workers so they continue to do so – and encourage employers who are not providing health insurance to begin to do so. The Governor wants to explore more incentives for businesses to provide coverage to their employees, as some states are doing.

Improve coverage in rural Oregon. Governor Kulongoski wants to make health care more accessible to those outside of urban areas. Too many rural communities suffer from a shortage of health care professionals.

The Governor is working with educators to provide incentives for students in rural Oregon to go into health care and for nurses, doctors and other health care professionals to locate in rural areas of the state.

The Governor has asked and was granted approval from the federal government to approve state-certification of more rural health clinics, which would increase the reimbursement rates for Medicare and Medicaid – keeping these clinics open and making access to care available to more rural Oregonians.

Maintain and improve our public health care safety net programs. No matter how solid we can make our private, job-based health insurance system, Governor Kulongoski knows that we will always need to sustain effective, publicly-supported safety nets for the disabled, the poor, the elderly and the unemployed.

He stepped up to help low-income seniors get the medications they needed when the Bush administration let them fall between the cracks of the new Medicare prescription drug program. The Governor’s quick action enabled 2,000 low-income Oregonians get their medications when the federal government refused to pay for them and helped another 4,900 seniors recover their prescription drug benefits from the federal government.

He increased school-based health clinics to 47 statewide, serving an additional 3,600 students in five new counties. In 2005-06, nearly 18,000 students were served by these clinics, 71 percent of whom had no other access to medical care. The Governor plans to open another 14 clinics during the next budget period, including seven in counties which are not yet participating in this program.

He has a plan to increase access to dental care for kids. The Governor will increase the number of mobile dental clinics and expand cavity prevention treatment for all children under his Healthy Kids Plan.

(3) Get Better Care for the Money We Pay

We know we can get better health care for the money we pay. Other countries have better health care and longer life spans than we do and pay a lot less for it.

Some steps are obvious. Improving the transparency of health information, so that consumers know the quality of the health care they buy and exactly how much it costs, will make health care delivery more cost-effective and of better quality. Also, we can take advantage of 21st Century technology, e.g. by using electronic health records, to make health care delivery more timely, accurate and efficient. Further, by expanding ongoing training for health care fields, Oregon’s health care workers will gain the skills they need to deliver the best and most up-to-date medical treatments in every part of the state.

Establish reasonable staffing ratios at health care facilities. With the current staffing shortage, nurses are asked to work overtime regularly, which increases stress levels and the likelihood of burnout, compromises patient safety and is ultimately more expensive. The Governor wants to continue working with the hospitals and nursing homes to improve the staff ratios so they are at levels that improve patient care and create a safe working environment.

Enhance our health care workforce. As more baby boomers retire from our skilled health care jobs, they and their contemporaries are also creating increased demands for health care services to support an aging population. This creates a classic combination of challenge and opportunity. We need 59,000 more health care workers in Oregon in the next 10 years, just as more young people are looking for rewarding jobs. Health care jobs are in high demand, particularly in rural areas, and the Governor’s plan will help to build the workforce to support that demand.

Train more nurses. The Governor launched the Oregon Healthcare Workforce Institute, a public-private partnership, to address the shortage of healthcare workers. The Institute will researching shortage occupations, bring public and private resources together to address shortages, develop policies to overcome barriers and track results. Already, together with healthcare and education partners, Oregon has increased the number of nursing graduates by 45% over the past three years.

Create more opportunities to enter health care professions. The Governor has streamlined the process to make it easier to transfer credits between OHSU, community colleges and Oregon’s universities. The Governor’s investment in the “N2K” training program resulted in a 50% increase in the number of nursing students at some community colleges. Now he wants to further increase the slots available in Oregon’s community college and university system to train more health professionals.

Establish the Oregon Simulation Alliance. The Governor initiated a coalition of public and private partners that use new simulation technology to expedite the training of healthcare workers and enhance the quality of healthcare professionals. Over 20 simulation coalitions have been formed, impacting the training of over 5,000 professionals.

The Governor has approved over $2 million in grants to train healthcare professionals at hospitals and health systems around the state.

Increase scholarships for health care related studies. The Governor developed a student loan package with Sallie Mae to help health care graduates who choose to stay and work in Oregon. Now he wants to help on the front end by increasing access and affordability for any student in any part of the state who wants to earn a degree in nursing and other health care fields.

Buy what works. Experts estimate that up to 25% of our health care dollars go for ineffective and unnecessary care. The Oregon Health Plan was founded on the premise that it would provide the most effective care to the most people depending on the resources available. We need to return to this principle and focus on services and treatments that will help avoid expensive emergency room care – and allow the Oregon Health Plan to serve more needy Oregonians at less cost. The work of former Governor John Kitzhaber and his Archimedes Project has highlighted new models for reorganizing all aspects of publicly-financed and tax-subsidized health coverage to create a more rational, cost-effective and universal system of health promotion and health care in Oregon. Former Governor Kitzhaber was the architect of the Oregon Health Plan, and Governor Kulongoski has committed to work with him to demand more flexibility from the federal government to allow states to restructure their health care delivery systems with both state and federal funds.

Another example of buying what works was the enactment of “mental health parity” legislation last year. Oregon established a requirement for insurers to provide mental health services on the same terms as medical services. Before the Governor signed this legislation, Oregon was one of the few states that did not require insurers to cover mental health or substance abuse treatment equally. Those who suffer from these problems often overwhelm our emergency rooms and public mental health service system. With parity, conditions can be treated sooner and comprehensively, improving health outcomes and recovery for people with mental illness.

Encourage prevention, healthy workplaces and healthier lifestyles. Our health care system has become a “sick care” system which focuses on treating diseases after they occur and ignores many tools for promoting good health and prevention.

Establish a clean air, smoke-free Oregon. The Governor supports a statewide ban on smoking in public places to protect our children from the cancer-causing chemicals found in secondhand smoke. Washington and California have stricter smoking regulations to keep air clean. It’s time we do the same.

Encourage healthy workplaces. Employers who encourage good health reap the benefits in the form of higher productivity, fewer absences and reduced disability claims. The Governor’s toolkit for employers has proven to work in state agencies – now it’s time for private businesses to follow the state’s lead.

Urge restaurant chains to disclose nutritional content. When it comes to eating healthy, knowledge is power and Oregonians deserve to know what their choices are so they can make an informed decision when dining out. Restaurants should post the calories and fat content of their foods. They have the information, it is time Oregonians do, too.

Work with insurance companies to encourage more preventive care. The Governor wants to work with insurance companies to reimburse doctors and medical providers for time spent on preventive care, such as nutritional and diet information, instead of only reimbursing for very expensive tests and assessments.

Establish statewide nutritional standards for all foods and beverages sold in competition to the school lunch program. By setting nutrition guidelines, schools can still have vending machines, stores, fundraisers, and a la carte food lines, but they would be required to sell only foods and beverages that meet the guidelines. If we make the healthy choice the easy choice, students may still spend their money in vending machines – and schools may still use those revenues to supplement program budgets as they do now -- but our children will eat better and be healthier.

Bring 21st Century technology to our health care system. By using electronic medical records systems, without breaching patient privacy, health care providers can access up-to-date patient information to improve care and reduce medical errors. By reducing the number of hand-written prescriptions, doctors can avoid mistakes that lead to drug overdoses and reduce unintended harm to patients. That’s why the Governor is working to get electronic health records systems into every doctor’s office in Oregon.

Protect patients from scams and fraud. The Governor wants Oregonians to have new options for access to care, such as medical discount cards, but he wants to ensure that they are also protected against fraud. That’s why he will require all medical discount card providers to register with the Insurance Division of the Department of Consumer and Business Services and fully disclose information about the discounts offered, the providers who participate in their plans and the notice they provide to consumers about their obligations to pay for medical services.

“Everything that works, nothing that hurts…”

Governor Kulongoski believes that far-reaching reforms at the national level are necessary to establish a health care system that is affordable, efficient, accessible to all Americans and sustainable for future generations. But he also recognizes that working families are suffering, employers are hurting and taxpayers are being squeezed by rising costs and declining coverage. As the federal government continues to ignore this crisis, the Governor believes that we have to take action at the state level to make health care more affordable and available to our citizens.

Governor Kulongoski’s “everything that works” approach does exactly that, undertaking a variety of smart, effective reforms that can reduce costs, expand coverage and improve the quality of health care for Oregonians.

By contrast, many of the so-called reforms enacted by the Congress and the Bush administration have shifted costs to consumers and protected the profits of drug companies and health care conglomerates over the interests of working Americans and our senior citizens.

Mindful of this experience, the Governor wants to make sure that state government is doing “everything that works – and nothing that hurts” to respond to real causes of our health care crisis and advance real-world cures that protect both our physical and financial well-being.

If Oregon can lead the way in reducing costs, expanding coverage and improving care, Governor Kulongoski believes that we can not only make health care more affordable and available to all Oregonians but also provide a model for long-overdue national efforts to create a cost-effective and sustainable health care system for all Americans.

Posted on September 27, 2006
Health Care