What does Oregon's proposed healthcare reform signal for the rest of the industry?

A ballot initiative in Oregon provides a glimpse of how grassroots healthcare reform is being addressed in the upcoming midterm election.

The Right to Healthcare amendment in Oregon would require that all residents have access to affordable healthcare, ensuring the state consider that right against other public services and funding. Known as Measure 111, it passed last year as a constitutional amendment after half a dozen attempts dating back 15 years, and was finally referred to voters for the 2022 election. Nearly a third of state constitutions recognize health explicitly or implicitly, according to the political action committee backing this initiative.

Oregon has a long track of organizing around the common good of its citizens, explains Chanda Causer, executive director of the Main Street Alliance, an organization founded by small-business leaders in 2008 that supports Measure 111.

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"Small-business owners need these types of investments to ensure that they have the coverage they need for their employees," she says. In a nutshell, Causer believes it would free up capital for nearly 400,000 small businesses across the state to buy the resources needed to continue competing in the open market — especially between rising inflation and labor shortages.

While the ballot initiative will not impact anyone's taxes, future legislation would determine funding related to implementing Measure 111 if it passes on November 8. Embracing a well-intended government solution without making hard decisions that could be made today will ring hollow at the polls, cautions Scott Haas, a partner and senior vice president with USI Insurance Services based in Bend, Oregon.

He suggests several steps toward meaningful reform of the nation's perverse healthcare system that would have an immediate positive impact on the marketplace. One includes eliminating or redefining the Affordable Care Act's minimum loss ratio provision, which he notes hasn't controlled health insurance costs.

While the federal government outlines the ACA's framework, he points out that fully-insured individual and small-group products are sold and regulated by state-run departments of insurance. That means lawmakers and regulators in a state like Oregon could conceivably cut in half the 20% medical loss ration under federal law. Prior to the ACA, most insurance expense loads were at or below 10%.

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While such a move would generate pushback, he says it would show backbone and resolve along the way to improving cost and care. "States have more power than what they may think they do, especially when you look at how the feds distribute money, for example, through all the Medicaid waivers," Haas observes.

Other strategies on his list that states could employ include reforming how health plans negotiate with and structure provider networks, and eliminating the nonprofit tax-exempt status of health systems, hospitals and health insurers.

He says three additional major steps that could be taken on the Rx side include eliminating misaligned incentives of rebates between pharmaceutical manufacturers and pharmacy benefit managers, banning direct-to-consumer advertising for prescription drugs and removing big pharma from the Food and Drug Administration, about 60% of whose budget the industry funds.

Believing all U.S. citizens have a right to basic healthcare services, Haas describes the current fragmented system of delivery and financing as "a grossly antiquated model" that doesn't equitably serve the public's needs.

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But he also notes that rampant fraud, waste and abuse exists across Medicaid, Medicare and commercial health insurance programs and there is opportunity to address this to reduce cost to consumers of healthcare goods and services. As such, he doesn't think it's wise to default to a single-payer system if there's no political will to address what is wrong with healthcare today.  Low hanging fruit abounds.

In assessing the merits of Measure 111 for his fellow Oregonians, Haas wonders, "What makes anyone think that a government solution will work any better, when it is federal and state government policy that now convolutes much of what is wrong with healthcare?"