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Health Care Agreement News Conference

May 4, 2012​

Thank you for coming. And thanks to Ed Blackburn and everyone at Central City Concern for hosting us today. You are blazing the way for what coordinated care can be, combining primary and behavioral health care in one facility, and serving 13,000 people every year. It’s wonderful to be here.

This is a defining moment for health care in Oregon. With unprecedented collaboration between local communities, health care providers and our federal partners, Oregon is on the right track to create a system that recognizes a fundamentally simple fact: that better care up front means lower costs later

As you know, we have reached an agreement with the federal government that will help us reduce the growth of health care spending substantially over the next decade and beyond.

The federal Department of Health and Human Services has agreed to upfront investments into the state Medicaid program through matching dollars that equate to some $620 million for the second year of our biennium, the first installment of a $1.9 billion federal investment over the next five years. This will give us important resources to support new models of care through Coordinated Care Organizations to improve health and lower costs for the long term.

Under this agreement, Oregon will reduce the cost trend in our Medicaid program by two percentage points within two years through improved health outcomes. The projected total state and federal savings are $11 billion over ten years. Over the next several weeks we will be codifying the terms and conditions of this agreement through the waiver process.

So the first piece of good news is that we will be able to transition into a new model of care without causing drastic reductions during the transition.

The second piece of good news is that even as we speak that new model of care is quickly being built and will be ready for these investments. This week we passed an important milestone. Monday was the deadline for CCOs who want to be up and running by August 1 to submit the first part of their application. Frankly, we were not sure how many we were going to get. We knew there were conversations happening in several communities but when push came to shove would the different elements of the elements really be able to come together and agree to work under one budget and be accountable for health outcomes?

I am very happy to report that the applications this week exceeded our expectations. Fourteen Oregon-based entities have come together to form Coordinated Care Organizations and if all were approved, this better model of care would be available to more than 90 percent of Oregon Health Plan clients.

The milestone events of this week will allow Oregon to begin shifting the focus of health care spending from acute care to prevention, better manage chronic conditions, and invest money locally on activities that help people stay healthier. Community health workers for example, or chronic disease services that help people manage their care to be as healthy and independent as possible.

I want to remind people how we got to this point. We have had a historic coming together of Democrats and Republicans, Hospitals and Providers, Rural and Urban. We came together with a shared vision for a solution that works for Oregon because we had a shared understanding of the challenge facing us all.

And the significance of these events go far beyond health care. This is also about education and the economy.

We’re leaning into health care reform because we can no longer simply stand by while businesses, families, and your state government are forced to spend more and more every year on an inefficient, hyper-inflationary system that is not making us healthier as a population – dollars that otherwise businesses could be using to create new jobs; families could be using to get out of debt and pay down their mortgages; and the state could be using to invest in children and education.

Today’s agreement is great news for our commitment to bend down the cost curve on health to free resources for other state priorities. Containing health care cost must be strategy number one for reinvesting in education.

We have been clear: our ambitious goals for educational achievement (40-40-20) are not attainable without additional resources.  The cuts that so many school districts are facing yet again this year are a case in point.  We must reverse the trends that have resulted in health care and corrections costs eating away at education funding. Today’s announcement is a major step forward. 

As we celebrate this milestone, there are far too many people to thank individually. Today is a joint success of many health care leaders, labor and business, the education community, our federal delegation and local lawmakers. But I want to particularly call out a few people in addition to those I have already introduced. Sen. Wyden, of course, who was not able to be here. Cong. Blumenauer. I want to thank my health policy advisors Mike Bonetto and Sean Kolmer and also Scott Nelson, who has been so key to our discussions this week. And also Dr. Bruce Goldberg, the head of the Oregon Health Authority and Tina Edlund, his chief of health policy. They traveled with me to DC and worked tirelessly to help make this agreement happen. While the federal government has been very supportive of our work here in Oregon from the beginning, it was the work of Bruce and Tina and their team at the Oregon Health Authority that truly helped show our federal partners that a. we are serious and b. we can pull it off.
Thank you to all these people and everyone unnamed. This is a joint success.

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