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Oregon Prescribes a Cure for National Health Need

September 03, 1989|Ed Salzman | Ed Salzman is consulting editor of Golden State Report magazine

LAKE OSWEGO, ORE. — Going by media reports, the most noteworthy action of the 1989 Oregon Legislature was extension of the state lottery to betting on National Football League games. Even within Oregon, far less attention was paid to the passage of a program that could eventually revolutionize the health-care system of the entire nation.

Without fanfare, Democratic Gov. Neil E. Goldschmidt this summer signed into law two bills designed to establish a "rationing" system for health benefits and to guarantee that every Oregonian gets care for "basic" health needs. The Oregon plan was produced in the legislative laboratory of Dr. John Kitzhaber, a Roseburg emergency-room physician who also happens to serve as president of the state Senate.

Across the nation, health experts are watching the Oregon plan to see if its performance matches its promise of saving money for both government and big business while distributing benefits to those who now have no medical insurance.

The plan establishes a priority system for those receiving publicly financed health care, gives health coverage to the so-called "working poor," forces most employers to provide medical insurance for their workers and provides tax credits to small businesses insuring their employees.

Kitzhaber's plan is a possible breakthrough in the long-sought attempt to develop a universal health-insurance program that contains realistic cost-control safeguards and maintains the free-enterprise system in medicine. Parts of the program could be in operation at the end of next year.

Oregon's pioneering effort marks a historical change in the source of health-care innovations. Over the past 50 years, essentially all major reforms in medical delivery have been launched either from California or Washington, D.C. California is credited with the development of the health-maintenance organization (HMO), the preferred-provider organization (PPO) and with injecting a large dose of competition into the medical marketplace. The other major change in the system was the establishment of the national Medicare and Medicaid (Medi-Cal in California) systems for the aged and the poor.

With legislation designed to cure the ailing health-delivery system stalled in Congress, the Kitzhaber plan has captured the imagination of politicians, business groups, consumer organizations and health associations around the nation.

A major effort is under way in Sacramento this year to provide health insurance for at least some of the 5.2 million Californians who now have no medical coverage. Most of the action centers on a bill by Assembly Speaker Willie Brown (D-San Francisco) that would require, starting in 1993, most state employers to provide health insurance for their employees. The Brown approach, which would extend coverage to about 2 million more Californians, includes no fiscal relief for employers, nor does it make any attempt to apply the brakes to ever-rising health-care costs for the state. A coalition called Health Access is promoting a rival plan, which may be placed on the ballot by initiative next year, to provide universal health insurance for all Californians.

Meanwhile, Kitzhaber worked his two-bill program through the Oregon Legislature with surprisingly light opposition. The only significant opponent was the National Federation of Independent Business, contending that small firms should not be required to absorb the cost of health insurance, especially at a time when the minimum wage is likely to rise. The plan was supported by Associated Oregon Industries, representing most of the state's major employers. The association hopes the plan will curb soaring health insurance costs.

Welfare recipients receiving Medicaid benefits now have few restrictions on the health services they can receive. But under the Kitzhaber plan, these services will be rationed. A special commission will establish a priority list for medical procedures, and state officials will decide every year how far down the list the state can afford to go.

Kitzhaber, a Democrat, claims the nation's health system "rations people while maintaining an increasingly rich benefit package for the shrinking number of people who remain eligible. And this constitutes rationing of the very worst kind--rationing that reflects no social policy, which has no ethical or clinical basis, which is being done silently, implicitly and by default."

In an attempt to show how rationing would work, the state of Oregon hired the Berkeley-based Bioethics Consultation Group to develop a model priority list. Prenatal care, immunizations and nutritional supplements received the highest priority, with organ transplants and infertility programs getting the lowest ranking.

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