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Report shows mixed results in first year of Oregon Medicaid changes

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SALEM, Oregon — Still smarting from the failure of the state's online health insurance exchange, Oregon on Tuesday announced that a separate piece of Gov. John Kitzhaber's health reforms is at least partly succeeding at improving care for Medicaid patients.

Oregon enlisted so-called coordinated care organizations two years ago to oversee care for Medicaid patients. Kitzhaber secured almost $2 billion from the federal government on the promise that the program, unique to Oregon, would lead to better care and lower costs, in part by better managing chronic diseases and preventing avoidable hospital visits.

A report issued by the Oregon Health Authority on Tuesday provided the first full-year data since the state's 15 coordinated care organizations started seeing patients. It showed emergency room visits for Medicaid patients dropped by 17 percent in 2013 from two years earlier, and hospitalizations for heart and lung problems also were down.

But there were lower scores on other measures, such as chlamydia and cervical cancer screenings and the admission rate for short-term diabetes complications.

"We are quite pleased with the improvement," said Lori Coyner, director of health analytics for the Oregon Health Authority. "We know that it's a process...and some of the measures are going to improve a lot early on and some are going to take a little bit longer to come along."

For the first time, coordinated care organizations will earn a small portion of their pay based on their results. Each organization had 2 percent of its payments withheld over the year, creating a pool of $47 million that was distributed based on success at meeting targets on 17 of the 33 metrics studied.

Ten coordinated care organizations received incentive money while five were docked pay. The care organizations showed wide divergence on some metrics, with several making significant progress while others fell back.

Advocates say Oregon's system of paying based on metrics gives doctors an incentive to focus more on their results than the number of procedures or visits. Many of the metrics measure the rate of screening for including diabetes, depression, substance abuse and various types of cancer.

"That is a direct benefit to the patient every time we find something we wouldn't have found if the test wasn't done," said Jeff Heatherington, CEO FamilyCare, one of two Portland-area coordinated care organizations.

FamilyCare earned extra money for its performance, which Heatherington said would be used to increase payments to primary-care and specialty doctors. Medicaid has historically paid far less than Medicare and private insurance, so raising the doctor's payment can make it easier for patients to get an appointment and for doctors to devote more time, he said.

Kitzhaber insists Oregon's reforms would lead to a more sustainable health care system if adopted more widely. The state has taken early steps toward applying the coordinated care model to public employees, and Kitzhaber has pitched the idea to governors in other states.

The Obama administration agreed to give Oregon a waiver from the normal rules governing Medicaid, a health care plan for the poor jointly funded by the state and federal governments and known here as the Oregon Health Plan. The state got $1.9 billion in additional Medicaid funds to help stabilize the state budget over a five-year period. In exchange, the state promised to save at least that much over the next five years by slowing the growth of health care spending by 2 percentage points.

The U.S. Centers for Medicare and Medicaid Services reacted positively to the data Oregon reported.

"We are encouraged by the overall progress Oregon has made so far in their effort to improve the delivery of quality health care to their citizens," said Aaron Albright, a CMS spokesman.

In addition to the reduction in emergency room visits, hospitalizations dropped 27 percent for congestive heart failure, 32 percent for chronic obstructive pulmonary disease and 18 percent for adult asthma.

Other measures were mixed. Some coordinated care organizations improved their rates of screening for colorectal cancer and diabetes while others did fewer screenings. The rate of hospital admission for short-term diabetes complications rose on a statewide basis, though some care organizations did improve on their numbers.

Many are struggling with implementing screenings for substance abuse.

Kitzhaber and state health officials have repeatedly warned that the numbers for 2014 will take a step backward because of an influx of 300,000 new Medicaid patients who gained coverage this year under the federal health care law. Many of those patients sought care in the emergency room because they didn't yet have a primary-care doctor, and some face complicated health conditions because of years without insurance coverage.

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