Reigning in Health Care Costs

By Nancy Tannler

The Oregon Health Authority (OHA) held their annual public hearing in April focusing on the impact of high and rising health care costs to Oregonians. The meeting represented a large cross section of professionals who could speak from first-hand experience on what is currently going on, and how to work towards comprehensive healthcare reform, in our state.

Since the 1980s, the cost of health care has increased in the US to the degree that we now pay more for health insurance than any country in the developed world. Premiums rose 14 percent, faster than inflation, putting health care insurance out of reach for many people. 

The state of Oregon has the third highest rate in the nation. As a society, we are hundreds of billions of dollars in medical debt.  Despite our costly health care, people in the US live shorter lives than other developed countries.

The OHA public hearing examined the current situation, listened to stories of those affected, determined weaknesses in the system and offered solutions as to what a better plan might look like in the future. They have set target dates for the process so that health care costs do not outpace wages or the state’s economy. The goal is to implement change by 2030.

During the height of the COVID-19 pandemic, there was a significant drop in people seeking medical attention for symptoms other than the virus. Many facilities, where the profit margin is slim, ended up laying people off and curtailing the services they offer during the pandemic.

As people began to resume their regular doctor visits, the system experienced two problems. The first is that health care workers are not all returning to their jobs, especially in rural areas. There is a shortage of critical care physicians and supporting staff. COVID-19 saw more females leaving the profession while more males are becoming nurses.

The second is that, since many people deferred treatment during COVID-19, their ailments became worse. Medical professionals are seeing more patients whose illnesses were compounded due to the lack of early intervention. 

The practice of telehealth is a positive benefit that came about due to the pandemic. It is here to stay said Shanon Saldivar of Saldivar Insurance. A lot of people preferred the ease of talking to their doctor online, plus moving forward, this could be a way to cut overhead costs for medical facilities. In turn this would be passed on to the consumer. Holly Murphy, a hospital health care worker from Eugene, told her story. She has a genetic immune system disease that required special treatment a few years ago. Her $8,000 deductible–which is about average these days–was not enough to cover all the different practitioners she needed for her treatment and were not covered in her plan. They each had their own deductible. 

Eventually daily living expenses took precedence over medical bills and Murphy began “drowning in debt.” She was sent to collections, her wages were garnished and she ended by filing for bankruptcy.

Many hospitals offer what is known as “charity care,” where necessary medical procedures are provided for free or discounted for people who cannot afford to pay. Murphy applied for this at the hospital where she worked. But she earned just enough, $15 per hour, to be denied. 

Murphy’s story is a common one said Maribeth Guarino of the Oregon State Public Interest Research Groups (OSPIRG), an independent, state-based, citizen-funded organization and is a member of PIRG, Public Interest Research Groups. PIRG conducts research on the left-of-center healthcare and tax policies for which OSPIRG advocates.

60 percent of bankruptcies are caused by medical debt. The average medical debt in Oregon is $2,000 per person. This includes all income levels.

The final segment of the hearing was devoted to efforts being made to address health care costs to consumers. Senate Bill 889 (2019 Laws) and House Bill 2081 (2021 Laws) established the Sustainable Health Care Cost Growth Target Program within the OHA. 

Doug Boysen of Samaritan Health explained that the biggest problem is the patchwork way medical services and payments are provided. There is not an integrated or cohesive system that links all wellness modalities together or comprehensive insurance policies. As it stands now, every provider is doing their own thing with no incentive to cooperate with other systems. When seeking advice from a specialist the consumer can pay a deductible every step of the way before reaching the doctor they need to see. 

An example Boysen used is the patient who is hospitalized for a mental health crisis when what they need is therapy, detox or rehab. These visits can cost the system about $20,000 dollars. In a situation like this, if the person in charge could key into a data system that funneled the person to the right help, it would be more efficient saving time and money. There’s an estimated $750 billion in annual waste in the health care system.

Chris De Mars, OHA, spoke of a Value Based Payment (VBP) plan they want to use in Oregon instead of the fee for service payment model. The VBP concept is where the purchasers of health care and payers hold the health care delivery system at large accountable for both quality and cost of care. VBP models can reduce a payer’s care costs by 5.6 percent. Bundled payment programs were found to reduce care costs at even higher rates.

For example, if you have a chronic condition such as diabetes, VBP care can help payers by working with one integrated team that already knows them and their health background instead of going to several institutes to get care. 

Fee for service payment does not reward quality care; has misaligned incentives; fragmented care; stand-alone providers thrive and they are hospital focused. Identifying waste and inefficiency will result in better care at a lower cost.

The VBP system believes that quality is important; prevention should be an incentive; care should be coordinated; different systems of care should be considered to promote flexibility and creativity in helping a person become well.

Oregon is leading the way as one of the first few states to set a cost growth target to rein in the rising costs of health care. For more information, visit bit.ly/HealthCareCostTarget.

Reigning in Health Care Costs

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