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John Kitzhaber

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Reviewing Oregon’s big Medicaid expansion


Mt. Hood, in Oregon’s part of the Cascade Range.

Here’s a look at Oregon’s much-watched high-risk, high-reward Medicaid expansion, which was launched by former Gov. John Kitzhaber, M.D.

To read the Health Affairs piece, please hit this link.

Kitzhaber’s advice to hospitals


Former Oregon governor and healthcare reformer John Kitzhaber, M.D., explains why uncertainty should require hospitals to focus on value and community health.  He talks about four forces compelling hospitals to change.

  • The skyrocketing price of medical devices and pharmaceuticals.
  • The consolidation of the insurance industry  is giving large commercial payers more power to force price concessions from providers. “This is exacerbated by the steady change in patient coverage from private to government payers, especially Medicaid and Medicare, both of which offer reimbursement lower than in the commercial market.”
  • Public and private payers are encouraging a move from fee-for-service to value-based purchasing. “This trend will force hospitals to maintain two payment systems at once: the FFS system that is generating most of the revenue and the shared savings system from which quality-based bonuses are calculated. The revenue generated from the FFS reimbursement model may not be sufficient to cover the cost of building a value-based organization.”
  • “{T}he rapid growth of disintermediating organizations such as ambulatory surgery centers and freestanding imaging centers, along with moves by large retail stores like Wal-Mart and CVS to become major providers of primary care, threatens to cut into both the specialty care and primary care business of hospitals.”
 He concludes:


“Current hospital strategies do not adequately anticipate the politics of an increasingly revenue-constrained environment in which public funding will increasingly be tied to measurable improvements in community health, and Medicare and Medicaid will have become the focal point of federal cost control efforts.”


“Those hospitals that still have healthy margins should begin to adjust their central role as major community employers, investors and procurers of goods and services. To do so, they need to use strategies that improve community health, including the courageous redeployment of resources upstream to address the social determinants of health. Now is the time to shape your own destiny.”

To read his piece, please hit this link.

Oregon’s secret to healthcare reform


William A. Galston writes in a very important piece in today’s  Wall Street Journal that Oregon is so far succeeding with its 15 regional Coordinated Care Organizations  involving Medicaid patients “designed to break down the multiple ‘silos’ of health services and provide integrated, patient-centered  services with a focus on primary and preventive care.”

Oregon’s governor, John Kitzhaber, M.D., is leading the way in developing this national model of reform.

So far, the plan seems to be succeeding in saving money while improving healthcare delivery. If it goes on like this, says Mr. Galston, “the results would be revolutionary….for the country as a whole, implementation of the Oregon model could save Medicaid more than $900 billion over the next decade.”

Cambridge Management Group has been working  intensely in Oregon on coordinated-care community-health projects and is very pleased that Mr. Galston is touting what we at CMG also see as potentially revolutionary improvements.

He notes that the Center for American Progress suggests expansion of the Oregon model ”to cover all healthcare spending, public and private,” in the U.S.


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