Proposal on capping health care costs would impact Oregonians – Oregon Capital Chronicle

When you receive a medical bill, it’s not always easy to keep track of what you’re paying for, even on a statement. Costs such as anesthesia, overnight hospitalization, and medications are clear, but the final bill includes many overheads. If hospitals and other health care providers can keep their costs down, perhaps our costs as patients can also go down.

Here in Oregon, elected officials have a history of trying to ease the financial burden on patients. In 2019, the state passed the Healthcare Cost Growth Targets Program. goal Its aim is to “provide better and emerging cost driver information to help identify waste and inefficiency, address underlying costs in the healthcare system, and inform policies that lead to cost reductions.”

This is primarily achieved by requiring healthcare providers to meet a target limit on spending growth (3.4% per annum). However, the 3.4% threshold is currently a soft target and will not come into effect until 2025, with no penalties for failing to reach the target until 2027. That is, if the program exists in its current form.

House Bill 2045, a bill currently under consideration by the Oregon legislature could radically change the rules. The bill would create blanket exemptions for eligible persons in the form of certain labor costs from providers. Healthcare providers will no longer have to count the labor costs of a significant number of employees when determining whether they are meeting state-mandated goals. This raises major concerns about the scope of the program and the ability of targets to effectively contain costs.

Labor costs are Often the biggest expense For the health system, according to the Oregon Hospital and Health System Association, which represents all hospitals in the state. Allowing providers to charge as much as they like to cover labor costs without requiring justification for those costs hinders the effectiveness of programs intended to contain costs.

The program already provides flexibility for businesses to exceed their goals as long as they have a “reasonable justification”. But hospitals and other health care providers are pushing for exceptions beyond “reasonable grounds,” ultimately leading to patients covering those costs through higher premiums and medical bills. As recently published, report State programs are increasing healthcare costs in Oregon and causing people to delay or not seek treatment, which can be harmful or even fatal.

Supporters of HB 2045 said on the House floor that while the bill was not a “blanket” exemption, it misrepresented the bill’s effectiveness. The bill itself states that “providers shall not be liable for any increase in costs resulting from the provider’s total compensation.” There is no time limit or other justification required for an exemption to be granted. What else is there other than a blanket exemption?

The bill would set a dangerous precedent that would allow providers to avoid accountability pending implementation of cost increase targets. This goal is not intended to penalize hospitals from purchasing equipment or hiring staff necessary for operations and patient care. It’s a tool designed to make providers think about how unwise and wasteful spending can be cut. Arguments to the contrary are dishonest.

Oregonians need qualified and competent professionals to staff clinics and hospitals. However, it is unrealistic to claim that labor costs are compensated for potential wasteful spending and remove the requirement to justify those costs.

Oregon legislators got it right for the first time with the cost target program. It doesn’t make sense for him to gut the program with HB 2045 before it gets off the ground.