Managed Care Organizations Say They’re Ready to Become CCOs

October 17, 2011—Three of the state’s largest health plans that deliver care to the Oregon Health Plan population don’t want to be left in the cold when coordinated care organizations (CCOs) take over next July.

“This could be mortal to some organizations,” Dave Ford, CEO of CareOregon, told the Oregon Health Policy Board, which oversees the Oregon Health Authority, last week. He was joined by Dr. Bob Dannenhoffer, CEO of Douglas County Independent Physician Association (DCIPA) and Dr. Peter Bernardo, a board member of the WVP Health Authority.

Their experience working with the Oregon Health Plan population, they said, is critical to handling the upcoming healthcare changes. It is possible that MCOs could become CCOs if they meet the criteria currently being developed by a governor-appointed workgroup.

“Deep structural change is needed in how healthcare is delivered,” said Ford. “We don’t have any models in the US that can deal with this kind of work.” Inefficient healthcare must come to an end, he said, particularly with the decline in Medicaid funding.

To make up for that decline, Ford said that existing dollars need to be reallocated to pay for adverse childhood events, chronic disease management and prevention, and create linkages between the mental health system, public safety and other sectors that interact with the healthcare system. “If we do this, we can live with less,” he said. “From our perspective, it’s to realize that this is not an experiment in Medicaid. This is for real.”

“This process is very difficult, and very complicated,” said Bernardo, referring to the state’s reform efforts. In an effort to coordinate care, the WVP Health Authority has developed a strong relationship with three clinics. “We have those ties,” Bernardo said. “The things you’re talking about in a CCO, we’re already doing.”

Dannenhoffer is confident his health plan, DCIPA, will become one of Oregon’s first coordinated care organizations. Its leadership has been meeting for over a year with the local hospital and physicians, and Douglas County’s Board of Commissioners. “We are committed to innovation,” he said.

The CEOs expressed concern and asked the Oregon Health Authority for guidance regarding the possible governance structure of a CCO, and what entities it would include. And they aren’t certain that the transformed healthcare system can actually realize savings of $239 million next biennium, a figure projected by Governor John Kitzhaber and the Legislature.

“We don’t see any way that there will be savings in the short run,” Dannenhoffer said. “We think the costs will increase.”

The massive overhaul of Oregon’s healthcare system under way is the result of House Bill 3650, approved earlier this year. It called for the creation of coordinated care organizations, which will integrate physical, mental and dental services for more than 600,000 Oregon Health Plan members starting next July.

Although the Oregon Health Policy Board invited the testimony given by Dannenhoffer, Bernardo and Ford, the final remarks given by Lillian Shirley, the board’s vice chair and director of Multnomah County’s health department, may point toward the Board’s enthusiasm toward the idea of letting MCOs continue to provide to Oregon Health Plan patients as CCOs.

“It was really thoughtful,” Shirley said. “We’ve got a lot to think about.”