States are the focus for the next stage of health care reform

By Laura Etherton of Portland, Oregon. Laura is a health policy advocate with OSPIRG, a non-profit, non-partisan consumer advocacy organization.

With the new federal health reform law in place, will Oregon consumers and employers actually see lower costs, higher quality, and more stable coverage?

The answer largely depends on what Oregon’s leaders do next.

According to a new OSPIRG report, Delivering on the Promise: A State Guide to the Next Steps for Health Care Reform, the new federal health care reform law puts state leaders in the driver’s seat, providing the tools – and funding – we need to make fundamental improvements in health care.

In many ways, Oregon is ahead of other states because 2009 Legislature passed a major package to address the rising cost of health care, and elements of that Oregon reform are already underway.

Stronger oversight over health insurance rate hikes took effect in April. The new rules prohibit excessive rate increases, and make public the insurance company justifications for rates.Oregon’s Insurance Division is now applying for million-dollar grant through federal reform to boost its rate review capacity.

The newly established Oregon Health Authority is hammering out details of plans to systematically cut administrative waste (pdf) and make smart use of health information technology (pdf), encourage best practices proven to boost quality, and keep Oregonians healthier in the first place. Like the Insurance Division, the Oregon Health Authority is pursuing new federal grant dollars to advance Oregon in these areas.

Most importantly perhaps, Oregon officials are already in the process of developing a plan for a health insurance “exchange.” Federal reform specifically gives each state the responsibility to set up an exchange, and Oregon is uniquely positioned to lead the way.

Done well, the exchange can be a real game-changer, giving individual consumers and small businesses the purchasing power to demand better quality, and drive a hard bargain. And by providing clear information and easy-to-use comparisons on insurance plans, it can promote competition on costs and quality. But if policymakers miss the boat, it won’t be much more than an “Expedia for health insurance.”

Oregon’s exchange should include key elements to make it a powerful force for consumers:

• It should offer a powerful, easy-to-use set of tools that put consumers in charge of their coverage, including clear comparisons between plans and quality and cost ratings, and that ensure there is a range of clear, distinct choices, rather than an endless array of confusing products.

• The exchange can improve care quality and lower costs by encouraging insurers to adopt reforms that deliver better care for consumers. It should have strong standards, and coordinate closely with the Oregon Insurance Division to actively negotiate with plans on behalf of consumers and stop excessive premium hikes.

• Oregon must ensure that the exchange’s governance is transparent, accountable, and responsive to consumers’ interests.

The Oregon Health Authority is scheduled to present a draft exchange plan to the August 10th meeting of the Oregon Health Policy Board. A final plan will go to the 2011 Legislative session for approval.

The bottom line is this: Whether Oregonians see relief from the rising cost of health care depends on what leaders do right here in Oregon. Washington, D.C. had its turn in the sun – now it’s Oregon’s time to shine.

The report is available on OSPIRG’s website.