Governor Urges OEBB to Cooperate in Exchange and Transformation Efforts

July 13, 2011—The Oregon Educators Benefit Board (OEBB) is going to be part of the state’s new insurance exchange, and will have to change the way its health plans deliver care to school district employees, according to Governor John Kitzhaber.

“The alternative is to cling to a system that doesn’t serve us well,” said Kitzhaber, who spoke to the board on June 16.

The governor wants the board to develop a three-year strategy by September outlining how its health plans can complement the state’s efforts to overhaul the Oregon Health Plan and transform the state’s healthcare system.

He praised OEBB for “negotiating with health insurance companies for outcomes and not just services,” and mentioned the board’s wellness program and emphasis on diet and exercise. After introducing a Weight Watchers program, during the first six months, 82,000 pounds were collectively lost among OEBB’s 150,000 members.

“That is a pretty good start,” Kitzhaber said. “[But] that is not going to be enough.”

Kitzhaber emphasized that it’s absolutely necessary for the board’s health plans to incorporate the changes being made by the transformation bill, known as House Bill 3650, saying it’s essential to bring healthcare costs under control.

“Healthcare costs are rapidly driving the state toward fiscal insolvency,” he said. “It’s not how to pay for healthcare. The real question is what we’re buying, and whether what we’re buying is producing the health outcomes at a price we can afford.”

Kitzhaber also wants OEBB to participate in the state’s insurance exchange. Created by Senate Bill 99, the exchange will be a public corporation that can negotiate insurance rates, and allow individuals and small businesses to compare and shop for health plans using a web-based system.

The hope for the exchange is that, by leveraging the purchasing power of OEBB, the Public Employees’ Benefit Board (PEBB), uninsured individuals and small businesses, healthcare costs can be driven down.

OEBB provides health insurance benefits to more than 150,000 school district employees, community colleges and education service districts and their dependents. PEBB covers 127,000 state employees and their dependents. Combined with the 400,000 people on the Oregon Health Plan, which will also participate, the insurance exchange will have more than 677,000 participants.

“That would effectively consolidate state's purchasing power,” Kitzhaber said, adding that leveraging the state’s purchasing power “is going to be increasing the importance” of the exchange.

The discussion around the state’s transformation efforts, created by House Bill 3650, have focused on the Oregon Health Plan and the 55,000 people who are dually eligible for Medicaid and Medicare.

But once the healthcare delivered to the dual eligible population, and then the rest of the Oregon Health Plan population, is transformed from managed care organizations to coordinated care organizations—that will consolidate physical, mental and oral healthcare—Kitzhaber wants the the health plans administered by PEBB and OEBB to also incorporate this new model.  

After Kitzhaber spoke, Steve McNanny, OEBB’s chair and executive director of the Oregon Educator Association (OEA Choice Trust), said the board believes rising healthcare costs are “robbing” members of wages.

“We are anxious to work with you, and find a solution to this problem,” he said.