Oregon's health care program for poor hits roadblock; State abandons promise to provide for all


PORTLAND, Ore. -- Nearly five years ago, Oregon began putting an idea to work that seemed both harsh and humane: In return for health insurance paid by the government, the poor would be required to join health maintenance organizations and have their care rationed.

Most tonsillectomies, infertility treatment, hernia surgery and removal of bunions would be denied. The program would support preventive and hospice care and, starting this month, doctor-assisted suicide, but rule out heroic intervention to stretch a life for a week or two.

With that, the state calculated, it could afford to provide basic care for the poor -- the goal of universal coverage that eluded President Clinton four years ago. With rationing, Oregon became the sole U.S. outpost of an approach to care that is routine in most developed countries.

But the Oregon Health Plan is hitting roadblocks. The state has abandoned its promise of universal care. Doctors routinely find ways to get around the rationing. And conflicts with federal Medicaid regulators have impeded efforts to deny more treatments.

A requirement that employers insure all their workers or contribute to a fund to cover them died early on. Spending for the plan climbed to $2.1 billion in the 1997-1999 state budget period from $1.7 billion in the 1995-1997 period. Higher cigarette taxes have not offset the increase, requiring more money from the state's general fund, and additional economic pressures await this year.

The concept of "rationing care, not people" in the sloganeering leading up to the plan's start in 1994 has been ignored by physicians. "The idea of this being a rationing system is really bunk," said Jim Kronenberg, associate executive director of the Oregon Medical Association.

Enrolling participants in HMOs has failed to deliver expected savings. The practice of managed care, with doctors, clinics and hospitals working together with HMOs to control patient care, is breaking down in rural areas.

For many of the poor, access to care has become more difficult. For many others, eligibility has become harder to establish and to hold. A program that was once free now charges premiums of $7.50 to $28 a month for a family of four.

There are 340,000 Oregonians covered by the plan, and 350,000 uninsured.

In his next budget, Gov. John Kitzhaber is proposing tougher screening of applicants and stretching the time it takes to approve applications from a day to at least a month. Members of the legislature, controlled by Republicans, are considering lowering the income levels for eligibility.

"We have to go back and revisit entry-level policy decisions," said Kitzhaber, the former emergency room physician who conceived the program.

"We're taking a pause to say: 'Are the structures right? Are our incentives right? Is it working?" said Barney Speight, administrator of the Office of Oregon Health Plan Policy and Research, which oversees the program.

But one thing is already clear: Health care for all cannot be attained. Hersh Crawford, the state's director of medical assistance programs, said: "Our goal is to have zero people in Oregon who are uninsured. I don't think we're going to make that."

Kitzhaber said, "If you could get to 5 [percent] or 6 percent" of the population, "you could declare victory."

That goal, too, looks remote. "Structurally, the plan is the right approach," said Donald Sacco, president and chief executive of Regence Blue Cross Blue Shield, the state's biggest health insurer and HMO company.

"But it has never provided what's needed to take adequate care of the population," Sacco said. "To get to the next increment, we're going to have to spend more money, and to do that is a question mark."

In the context of the nation's health care, policy analysts still call Oregon's program innovative and promising. From 15 percent, the state says the uninsured population has dropped in five years to 11 percent. In spite of the plan's difficulties, groups with special interests in care support the ideas behind it and in most respects the way it works. Physicians, while irked about pressures on their incomes, see no turning back.

"It's certainly better than where we came from," said Dr. Michael Bonazzola of Physician Partners Inc., a practice management company owned by physicians.

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