We finally created a dynamic in Oregon that gets a handle on health care costs," said Mark Gibson, former chief of staff to Oregon Senate President John Kitzhaber. Now, everybody knows they have a responsibility to pay and everyone is trying to avoid costs. You change the dynamic, you open doors in terms of reducing waste and inefficiency."

Gibson and Tina Castenares, M.D., a member of the Oregon Health Services Commission which took on the job of ranking over 700 medical procedures before they were sent to the Oregon Legislature which set funding levels for service, were in Topeka late last month to meet with members of the Kansas Legislature, Department of Social and Rehabilitation Secretary Donna Whiteman, and SRS Commissioner of Income Support and Medical Services Robert Epps.

Also attending the day-long meeting were several health care advocates and advocates for the poor, representatives of hospitals, dentists and others health care providers, and SRS medical services staff. Gibson and Dr. Castenares are members of an Oregon consulting group under contract with SRS to help develop a hierarchy of services proposal in Kansas.

SRS has been asked to look at the prioritization of medical services closely because state revenues can no longer keep up with the fast-increasing cost of state-supported medical services. Medicaid costs in Kansas have increased 146 percent just since 1988, and there is no let up is in sight. The increase in medical costs in the first quarter of this fiscal year alone is 19.5 percent over the same quarter in fiscal year 1993.

We are confronted with a Medicaid budget that continues to grow faster than any other segment of state government," said Secretary Whiteman. Further complicating the state's ability to provide medical coverage to our poor and most vulnerable citizens is the loss of about $150 million in federal disproportionate share funding - almost 20 percent of our Medicaid budget.

We cannot react in a haphazard and piecemeal fashion to these very real budget limits," Whiteman added. Prioritization of services must be done in conjunction with health care reform. Kansas cannot wait for whatever kind of health care reform is decided on in Washington D.C.

Health care reform needs to happen now in Kansas."

Secretary Whiteman said SRS is working with various groups across the state to determine Kansans' values concerning health care matters, including Midwest Bioethics. These values will be combined with clinical and cost considerations to establish a priority ranking of health care services.

Whiteman said the Oregon experience will be looked at closely as Kansas determines it's own set of priorities for health care services.

After more than three years in preparation, the Oregon Health Plan takes effect in January. The plan received a necessary waiver from the U.S. Department of Health and Human Services last year.

It was overall health care reform and not singularly the priority setting that helped move the process in Oregon, Gibson said. He said the first step they undertook was agreement between everyone involved on basic principals guiding the debate. The first decision was that universal access was a goal.

The Oregon Plan for health financing was designed from the outset to realize a specific and far-reaching social goal - universal access to health insurance for all Oregonians," he said.

Throughout their talk, Gibson and Dr. Castenares stressed the fact Oregon did not create a health care prioritization system only for poor people on Medicaid, but for everyone in the state. Besides prioritizing medical services under Medicaid, the Oregon plan mandates that employers supply health insurance with benefits at least equal to benefits in the prioritized plan for Medicaid recipients by 1997.

If you only prioritize Medicaid services, you open yourself up to social and political challenges," Gibson said. You need a broader context so it's not 'us' versus 'them.' The prioritized list commissioned by the (Oregon) legislature was intended for resource allocation both for Medicaid beneficiaries and eventually for all workplace-insured people."

Gibson said Kansas state officials will faces an arduous task if they try to move forward without consensus.

To reallocate resources within the medical budget cannot be viewed as an easy way out of a budget dilemma," Gibson added. And it cannot be done without forceful political leadership or without taking the time to resolve difficult issues in an open and inclusive manner."

Dr. Castenares stressed the importance of concentrating on the technical aspects of creating a priority setting system. She said an accurate list of medical outcomes for procedures and the cost of those procedures is all-important.

The biggest lesson we learned is that methodology is everything," Dr. Castenares said. We spent three years developing this. You have to have real commitment. It is not something you can put on autopilot."

Dr. Castenares also said it was very important the committee she was on which created the ranking order of services was insulated from legislative decisions on how many services were to be funded.

We were not deciding what health care will be purchased in Oregon," she said. What we were doing is setting a ranking order. It was not our job to decide at what level the order was financed but to prioritize services."

The rankings of health care services eventually decided upon in Oregon put additional emphasis on preventative care and less emphasis on services that are cosmetic in nature, services that respond to home care, conditions self-limiting in nature, and services that are futile.

Under the Oregon Health Plan, health care procedures funded by government are ranked according to several criteria, including effectiveness, duration of benefit, cost, and difference in life expectancy with or without the treatment. Oregonians also let their government know through scores of town meetings, public forums and even an extensive telephone survey that they rated the quality of life higher than longevity of life and considered comfort care vital, Dr. Castenares said.

People, in our value discussions, told us compassion is very important," she said. They had a lot of fear we would look only at effectiveness."

Dr. Castenares said the Oregon Legislature was able to fund about 83 percent of the prioritized list. Some services such as cosmetic surgery and varicose veins stripping were no longer covered. But other things such as restorative dental work for adults and many preventative services were covered under the new plan.

Other principals agreed upon in Oregon included the following:

*Eligibility for Medicaid benefits should be based on need. Oregon did away with the multiple categories of eligibility for Medicaid services and set one standard - anyone who lives at or below 100 percent of the federal poverty level is eligible for services offered in the Oregon Health Plan;

*There should be a renewed commitment to a health maintenance organization type of managed care.

*Allocations for direct health care should be balanced with other state-supported services that help maintain people's health.

*The social value of health care services should be taken into account in priority-setting, along with effectiveness of the treatment.

*Persons who cannot get health insurance because of high risk should have state-supported plans.

Oregon, like Kansas, faced a real dilemma in public funding for medical services before developing and getting approval for the plan.

We knew we couldn't continue spending the way we were," said Gibson.

But with the prioritization of health care services, Oregonians not only appear to have solved their Medicaid budget problems, but have also greatly increased access to health care for all their citizens, Gibson said.

With the Oregon Health Plan, we were not just saving money but increasing access. We will bring 120,000 new people under the prioritized Medicaid system. And the benefit package provides more medical services than were available in the past."

Page Last Updated: May 29, 2001