State Considers Major Reform of Health Care System

The state of Oregon is moving toward a sweeping transformation of general health and mental health services, including the creation of regional "coordinating care organizations (CCOs)" responsible for organizing the delivery of all health services for citizens in each region of the state.

CCOs are the state's designated term for what have elsewhere been called "accountable care organizations" (ACOs)—the coalitions of hospitals, health systems, physicians, and other health care providers envisioned as a new model for providing coordinated, cost-effective care across populations. In the Patient Protection and Affordable Care Act, for instance, ACOs have been designated as a model for providing care under a demonstration project within the Medicare program (see CMS Issues Rule Describing Standards ACOs Must Meet).

The proposal for delivery system change is still in the planning stages and will require legislative approval in the state as well as a federal Medicaid waiver.

Oregon psychiatrist David Pollack, M.D., who is on the board of the American Association of Community Psychiatrists, told Psychiatric News that the plan for regional CCOs in Oregon would essentially create something like a single-payer system for each region. In some cases a region may have more than one CCO, but the CCOs would—in the manner of a single-payer system—be responsible for the financing, organization, and delivery of all health services, and in time they would cover all citizens within the region.

"These CCOs would obtain and utilize the funds from public and private sources to coordinate a diverse panel of providers for a wide range of health services, including general medical, mental health, addiction, and dental services, as well as the health services required by persons in long-term-care settings," Pollack said. "They would coordinate care through delivery-system refinements that would attend to the comprehensive needs of patients and the interdependence of health conditions and health providers associated with those conditions.

"There will be major emphasis on clinical integration of behavioral health and primary care and the implementation of person-centered primary care homes," he said. "[The delivery system transformation] will also involve promoting more systematic prevention and chronic-care efforts, efforts to increase health literacy, culturally competent policies and methods, and increased active participation by patients in their own care and in the overall operation of the health system."

Pollack is also a professor of public policy in the Department of Psychiatry and the Division of Management at Oregon Health and Sciences University.

Like the ACOs envisioned in the Medicare demonstration project, Oregon's CCOs would be charged with creating savings through coordination of care, and participating provider panels would share in those savings.

In 2009, Oregon approved a health system reform bill that anticipated in many ways the features of the federal health care reform law, creating health insurance exchanges for the state and a new Oregon Health Policy Board responsible for implementing the health care reform provisions.

However, the state—still reeling from the economic downturn that began in 2008—is facing a $3.6 billion deficit, and Gov. John Kitzhaber (D) came into office arguing that sweeping changes in the delivery system were needed before the state could move toward universal health coverage of its citizens envisioned in the state's reform bill.

(Kitzhaber is an emergency physician who was instrumental in passage of the Oregon Basic Health Services Act in 1989, which received national attention for its effort to prioritize health and mental health services for the state's Medicaid population.)

A Transformation Team was created in December 2010 and charged with devising a comprehensive redesign of Oregon's health delivery system. A timeline has been established that envisions implementation of a newly designed delivery system by January 2013.

A March report by the Transformation Team to the legislature outlined the composition and function of CCOs. According to the report, a CCO is "an organization that serves as a single point of accountability for the cost of health care within a global budget and for access to and quality of a coordinated system of physical health, behavioral health, and oral health services delivered to the specific population of patients enrolled with the organization."

Notably, the team report stated that CCOs should prioritize services for patients "with high needs and multiple chronic conditions, mental illness, or chemical dependency to involve them in accessing and managing appropriate preventive, remedial, and supportive care and services … ."

Pollack told Psychiatric News that Medicare and Medicaid populations would be blended together and would be the first to be covered by the CCOs, followed by state employees and later privately insured individuals.

"The vision of the transformation team heavily promotes the use of primary care providers and primary care medical homes, and we have articulated very clearly that mental health has to be included in these primary care homes," he said.