Oregon puts bold health plan on ice

Article Abstract:

A plan to prioritize medical procedures for Medicaid recipients attracted much attention when it was proposed in May of 1990 in Oregon, but the plan has encountered difficulties. Promoted by the Oregon Health Services Commission, the plan calculated the cost-benefit ratios of almost 2,000 procedures and ranked them based on this ratio; it was a first step toward rationing Medicaid funds. But the initial plan ultimately failed when it, for instance, ranked treatments for thumb-sucking and acute headaches higher than treatments for AIDS or cystic fibrosis; consequently the proponents of the plan were greatly embarrassed. However, the problems encountered underscore the complexity of decisions regarding what form of basic health care should be provided for everyone. Americans spend almost $540 billion annually on medical treatments, an amount that constitutes 11.1 percent of the gross national product. The states want to reduce their expenditures for Medicaid programs, and Oregon was the first state to put forth a concrete proposal. An early move by the state to save money was to stop supporting organ transplantation programs for Medicaid recipients in favor of improving prenatal care. However, the deaths of five children and one adult who needed transplants but could not afford them provoked widespread calls for reform. Residents of the state are opposed to raising taxes, a position considered untenable by critics. The future of health care rationing in Oregon is, at present, dim indeed, and the larger question of health care reform remains similarly unanswered. (Consumer Summary produced by Reliance Medical Information, Inc.)

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Oregon's plan comes to the capital

Article Abstract:

Oregon's proposal to ration health care for Medicaid recipients according to the cost/benefit ratios of various procedures has produced a strong, partisan political response in Washington. Democrats fear the Oregon plan will deny services to the most vulnerable sector of poor people (children and women), while Republicans are in favor of it. The opinion of federal legislators is important because Medicaid is funded according to strict federal guidelines, and Oregon needs waivers of some of those guidelines in order to put its plan into action. Federal requirements that would be violated include a ban on restricting the treatments covered, and the requirement that families receiving Aid to Families with Dependent Children automatically receive Medicaid. Nine waivers are being sought through administrative and legislative channels. A major objection to Oregon's attempts has been voiced by Representative Henry Waxman of California. Waxman notes that the only treatments that would be restricted would be those for women and children, who currently make up 70 percent of the state's Medicaid population but receive only 30 percent of the budget. The blind, elderly, and disabled, who receive 70 percent of the budget, are represented by powerful lobbying groups. Supporters of the Oregon reform program claim it could offer help for people who are currently not covered. Further debate is on hold until Oregon completes revisions of the plan. (Consumer Summary produced by Reliance Medical Information, Inc.)

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Listing to starboard: the Oregon formula

Article Abstract:

The health care plan proposed in Oregon to ration care for Medicaid recipients relies on a ranking of medical treatments according to their net benefits. A mathematical ratio called the 'net benefit value ratio' is the central element used in ranking the medical procedures. The ratio was developed by Robert Kaplan, a professor, and his two colleagues. It weighs the benefits of a medical treatment against its financial costs. The benefits are calculated based upon the probable result, duration, and value of the treatment on a 'quality of well-being' scale; this number is then weighed against the treatment's cost. Data to compute the formulas were gathered from physicians and from the general public, in part by means of a random telephone survey of 1,000 Oregonians. This approach proved unsatisfactory. The medical costs cited by physicians led to some conditions, such as thumb-sucking and acute headache, receiving higher priority scores than treatment for AIDS, since they can be treated for a low cost with long-lasting benefits. Kaplan is not discouraged by his plan's initial failure, and believes that Oregon needs to improve the ways it uses his formula. He feels the plan will lead to a 'net benefit of health for all', including children, citing its emphasis on prevention. The model has yet to prove its merits. (Consumer Summary produced by Reliance Medical Information, Inc.)

Evaluation, Medical care, Cost of, Health care costs

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