An important step for Oregon health care reform

By Samuel Metz, M.D.
The Oregonian, May 30, 2016

This month, the Oregon Health Authority made a wise decision: It approved the RAND Corporation to perform its legislatively mandated study of financing high-value health care in our state.

This is no small effort. Health care in Oregon consumes about $38 billion annually (the completed study will provide a better figure) — 18 percent of all spending in the state. This is twice what Europeans and other English-speaking countries spend on health care. Yet most measures of public health place Oregon at the bottom of the industrialized world. The rest of our country looks no better.

The RAND Corporation's first challenge is to analyze four methods of financing universal care in Oregon, in which each option must provide all Oregonians with care when they need it. Then comes the hard part: It must select the best option for our Legislature.

Why study universal care? To remedy our low-value health care spending, the Oregon Legislature recognized that every other industrialized nation provides universal care. And all these nations provide better care to more people for less money. That's "high-value."

Oregon's study focuses specifically on one aspect of high-value care: how to best collect the money (e.g., premiums, single payer, state-purchased private insurance). The study leaves for another time the question of how to best pay providers (e.g., fee for service, capitated funds, managed care).

This focus is appropriate. Oregon should not speculate on how to spend health care funds until it finds a sustainable way to collect money in the first place. Hence, the RAND Corporation's study will start Oregon's health care reform discussion, but not end it.

Why was this organization a good choice? The RAND Corporation is one of America's oldest policy-analysis think tanks, created in 1948 in the heat of the Cold War. One of its first researchers was Herman Kahn, author of "On Thermonuclear War." (Kahn was reputedly a model for Dr. Strangelove in the movie of that name.)

But the RAND Corporation expanded from national defense into health care with a dramatic series of experiments in the 1970s examining the relationship between insurance deductibles and outcomes. These publications remain a mainstay of insurance analysis to this day.

The Oregon Health Authority picked a credible, competent and experienced organization to investigate health care financing in Oregon.

One challenge, however: Organizations performing similar studies for other states estimated our study needs 12 to 18 months for completion. Had the OHA made its selection immediately after the bill was signed in August 2015, the chosen organization may have completed its work by the November 2016 deadline. Now, 10 months later, the RAND Corporation has only five months.

But the RAND Corporation knows its business. Regardless of when it presents its results, our legislators will finally possess the information they need to make intelligent decisions about the future of health care in Oregon.

The OHA did its job: It selected the right organization. The RAND Corporation will now do its job: perform a competent analysis. Ultimately, we Oregonians must then do our job: ensure our legislators read and act on the results.

This study is the next critical step toward achieving better care to more people for less in Oregon.

Samuel Metz, of Southwest Portland, is an anesthesiologist.