JOINT TASK FORCE ON HEALTH CARE COST REVIEW (Senate Bill 419) - - PowerPoint PPT Presentation

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OREGON HEALTH AUTHORITY Office of Health Analytics

LPRO: LEGISLATIVE POLICY AND RESEARCH OFFICE

JOINT TASK FORCE ON HEALTH CARE COST REVIEW (Senate Bill 419)

IW - Attachment 6 October 16, 2018

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OREGON HEALTH AUTHORITY Office of Health Analytics

Senate Bill 419 (2017) established the Joint Interim Task Force on Health Care Cost Review to study the feasibility of creating a hospital rate-setting process in Oregon modeled on the process used by the Health Services Cost Review Commission in Maryland. Specifically, the Task Force sought to:

• explore opportunities to limit the growth of health care expenditures in

Oregon

• address cost drivers in Oregon, with initial focus on hospital costs
• assess potential impact and feasibility of the Maryland model
• consider and evaluate alternative models to accomplish the goals in

Senate Bill 419

SB 419 Task Force Charge

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OREGON HEALTH AUTHORITY Office of Health Analytics

Summary of Task Force Activity

• Sixteen-member Task Force invested over 1,000 hours into

examining the Maryland model, hearing from national and state health policy experts, and working to develop a consensus around a set of recommendations designed to contain health care cost growth in Oregon.

• Task Force worked to assess opportunities and challenges

associated with:

• establishing models of accountable care organizations;
• creating multi-payer and all-payer approaches to transform health care

payment; and

• key factors to consider in establishing a statewide benchmark to limit

the annual rate of growth in health care expenditures.

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OREGON HEALTH AUTHORITY Office of Health Analytics

Key Policy Considerations

• Promote cost containment
• Support payment reform
• Address price variation among payers and providers
• Offer multi-payer approach (public and private)
• Create fixed, stable, predictable rate of spending/growth
• Build on Oregon’s successful 3.4 percent rate of growth in Medicaid
• Promote accountability through reporting, transparency and public

hearings

• Remain true to Oregon’s unique health care environment.

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OREGON HEALTH AUTHORITY Office of Health Analytics

Task Force Findings

The Task Force opted not to recommend adopting the Maryland hospital rate-setting model, at this time, based on the following:

• Historical approach focuses on fee-for-service rather than paying for

value and fails to align with Oregon’s payment reform efforts including incentivizing prevention and population health services.

• Hospital care is a shrinking proportion of health care spending, and a

hospital-based rate-setting system could potentially incentivize out- migration of care from regulated hospitals to unregulated outpatient providers (non-hospital providers).

• Maryland’s rate-setting system is complex and administratively

challenging to implement and maintain over time.

• The model requires a federal Medicare waiver.

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OREGON HEALTH AUTHORITY Office of Health Analytics

Statewide Cost Growth Benchmark

• Establish a single statewide benchmark for health care spending that

is fixed, stable, predictable, and economically sustainable.

• Develop and adopt a benchmark methodology to measure total cost of

care across healthcare at the state level, and as practical, account for variations of patient mix, and geographic regions and workforce.

• Ensure calculation of total health care expenditures encompass

spending on all health cares services across the state for all populations.

• Identify individual health care providers and payers who shall publicly

report, and are to beheld accountable for staying at or below the benchmark.

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OREGON HEALTH AUTHORITY Office of Health Analytics

Statewide Cost Growth Benchmark (cont.)

• Determine oversight entity responsible for maintaining and enforcing

the benchmark; identify outlier costs, price variation, waste or inefficiency, and cost drivers that contribute to growth; and report annually to the Legislative Assembly.

• Support market-oriented approach by enhancing public reporting,

transparency, and collective accountability for spending for all providers and payers.

• Align reporting and use of quality measures across payers and

providers as foundational to the improvement and accountability structure for the benchmark.

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OREGON HEALTH AUTHORITY Office of Health Analytics

SB 419 Next Steps

• Formal report with recommendations submitted to

Legislative Assembly on Sept. 13, 2018

• Fall 2018 – drafting of legislative concept by Legislative

Counsel

• 2019 legislative session – introduce bill modeled after the

Task Force recommendations

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SB419 impact on SB1067

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OREGON HEALTH AUTHORITY Office of Health Analytics

SB419 SB1067

Controlled rate of Growth

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Questions?

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OREGON HEALTH AUTHORITY Office of Health Analytics

IW - Attachment 6 October 16, 2018