The Oregon Health Plan

1. The Oregon Health Plan Individual State Initiative: A Grassroots Way Out of Crisis?

2. U.S. Attempts at National Health Care Insurance • 1912: President Theodore Roosevelt and Progressive Party reform • 1935: President Franklin D. Roosevelt signs Social Security Act, with a national health insurance system as the next step • 1945: President Harry S. Truman tries to include universal health insurance within Social Security • 1965: The “New Society” of President Lyndon B. Johnson creates Medicare and Medicaid • 1972: President Richard M. Nixon proposes universal health care • 1993-1994: President William J. Clinton’s Health Security Act

3. Simple is Best • “I draw my idea of the form of government from a principle in nature which no art can overturn, viz., That the more simple any thing is, the less liable it is to be disordered, and the easier repaired when disordered.” Thomas Paine, Common Sense (1776) • Would leaving it up to the individual states be simplest? • An old debate in American history: Federalists and Anti-Federalists

4. Some Big Questions • Considerations of Distributive Justice • Utilitarian: Maximize total welfare of most citizens, even at expense of sacrificing some individual liberties and opportunities • Libertarian: Governments should not distribute goods, but only secure them • Egalitarian: Duties of mutual aid and reciprocity, as long as basic liberties are protected • How might we characterize the Oregon Health Plan?

5. Grassroots Background to the Oregon Plan • Oregon Health Decisions (OHD): private, non-profit organization with educational and ethical concerns regarding health care (formed in 1980s) • Oregon Health Council convenes a Governor’s Conference on Health Care: • “What are the relative values society places on curative and preventive services? • “What is the possibility of making [already existing] rationing explicit and congruent with community values? • Oregon Coalition for the Medically Needy • Oregon Bioethics Conference, Inc.

6. Structure of Oregon Plan • Priority Ranking System • 709 condition-treatment pairs (e.g., appendicitis/appendectomy) • 17 general categories of conditions and treatments • Condition-treatment pairs placed in general categories and rank ordered (“impact on quality of life” and “clinical effectiveness of treatment”) • Commissioners (Oregon Health Services Commission) move certain condition-treatment pairs up or down “by hand” • July 1992: Oregon state legislature votes to fund condition-treatment pairs through # 587 • Goal: Minimum Benefits Package to All (Utilitarian or Egalitarian?); ends up primarily affecting Medicaid patients • Number of conditions and treatments, not the number of people, are restricted (100,000 added to Medicaid)

7. Structure of Oregon Plan for Health Care Rationing • All people below federal poverty level eligible for Medicaid • Medicaid benefits package consists in prioritized list of diagnoses and treatments • State legislature “draws the line” on which treatments are covered • State legislature cannot reduce reimbursement rates to Medicaid providers • Managed-care plans provide Medicaid services • Employers required to insure employees, with prioritized list as the basic benefit package

8. Ethical and Moral Problems • State explicitly condones withholding care • Tyranny of the majority: medicaid beneficiaries, minorities, and working poor were under-represented in public debates over plan • Quality of life priorities violated the principle of the sanctity of life • Containment strategies for controlling health care costs had not been exhausted • Increased taxes for those who can afford it (Oregon in 1992 had no sales tax) had not been exhausted

9. Further Problems with Oregon’s Plan • Distinction between health services contributing to overall well-being of society and those valuable only to certain individuals is arbitrary • Setting up prioritized list does not account for variations in severity of illness in patients with same diagnosis • Coexisting conditions are not considered • Waiting for prioritized conditions to develop while leaving non-prioritized ones untreated can result in severe health crisis and more expensive treatments • Physicians (who take the Hippocratic Oath seriously) may be tempted to diagnose an excluded condition as a covered condition (what value would one’s health record then have?)

10. Unacceptability of Oregon Plan: The Bottom Line • Patients can be denied beneficial services for financial reasons • The poor (Medicaid patients) are the ones who will be denied • The affluent can pay “out of pocket” for any treatment they can afford • Result: Gross inequalities in health care based on class discrimination

11. Robert Steinbrook, M.D. and Bernard Lo, M.D. “Oregon’s plan consigns to a lower standard of care Medicaid patients who need treatments that are standard medical practice but rank below the cutoff line.”

12. Al Gore on the Oregon Plan (1990) “Oregon’s road to health was paved with good intentions. But, after ruling out new taxes, refusing to take money from other programs, and refusing to seriously examine wasteful expenditures in the health care system, state planners chose the weakest and most vulnerable groups in the state, its poorest women and children, to pay the bill. It will reduce their benefits by an amount equal to that needed to add the 77,000 [new Medicaid patients].”