Oregon's Plan: Should It Be Approved?

Abstract

On August 19, 1991, the Oregon Department of Human Resources submitted to the Health Care Financing Administration (HCFA) a proposal to conduct its new Medicaid program as a 5-year demonstration project. If approved, the most visible and controversial plan to reform health care coverage for the poor and uninsured will be set in motion. If denied, the results of 2 years of hard planning and negotiations will disappear, and 2 years of debate will become moot....The main conceptual question is whether the proposed program is something that should be demonstrated. That is, if this demonstration is completed as expected, will the results be something the federal government will want to offer as a possible model for other states? The first step in answering these questions is to agree on the criteria that should guide the decision. Reasonable criteria include the following: there should be good reason to believe that the new program will improve on the current program; the program should have the capacity for self-improvement; and there should not be any other programs that are obviously superior and that would be preferable to Oregon's, no matter what the demonstration showed. Notice that these criteria do not ask that the proposed program be perfect or that everyone like it. The problem of financing care for the poor and near-poor in this country is too coomplex, there are too many constraints caused by current regulations, and there are too many constituents with conflicting objectives to achieve that. Instead, all anyone can ask is that the proposed program take a step in the right direction....As with any public proposal that attempts to solve a complex social problem, everyone has something they would like to change about Oregon's plan. I myself am unhappy with the priority-setting method. But however stimulating those debates might be, they should not confuse the real issue raised by Oregon's proposal. That proposal is the result of years of work and political compromise, conducted under severe restrictions imposed by current laws and competing constituencies. The decision today is not how to fine-tune Oregon's plan, but whether the plan, as it is currently configured, deserves a demonstration. The main criterion should not be whether the plan is ideal. As Oregon's leaders are the first to admit, it is not. Indeed, it is highly unlikely that any plan that emerges from a political process ever will be ideal. The criterion should be whether Oregon's plan improves on what is currently happening.