BACKGROUND
Skyrocketing healthcare costs are one of the top issues on the minds of voters of all ages and political persuasions.  It is one of the major issues in the 2008 presidential campaign.  And it is one of the top agenda items for Oregon public officials for 2009.

Even with the economy heading into the tank, we have a very real opportunity to enact reforms that can profoundly cut the cost of healthcare for all Oregonians, while improving the level of care.  

Read on…

PROBLEM
Oregon businesses and consumers are getting slammed with rising healthcare premiums and out-of-pocket costs.  These costs are rising at twice the rate of inflation.  More and more people have annual deductibles of $1000 or greater.

The problem is now so bad that increasing numbers of people with insurance are unable to pay their medical bills. 57 million Americans live in families having problems paying their medical bills.  75% of them already have insurance.  

What’s the good of health insurance if you can’t afford it and it doesn’t protect you when you’re sick?  What the heck is going on?

A lot of pundits argue that the reason is that the US population is getting older and people are filing frivolous malpractice lawsuits, and that we need to curb lawsuits and start rationing care.  

This is incorrect, however.  The main reason why healthcare costs are so high is that we spend too much money on stuff that actually doesn’t do anything to improve care.  

CALPIRG did a great report this year that found three categories of unnecessary spending.  First, we use too many expensive treatments (like sending people to hospitals) before using simpler, cheaper and more effective treatments (like a simple phone diagnosis or clinic visit).  Second, insurance companies and hospitals waste money on duplicative and inefficient administrative practices.  Third, drug companies spend billions marketing expensive drugs that then get prescribed over cheaper, equally effective drugs.

SOLUTION
So, the real solution is to reducing health care spending that doesn’t make us healthier.  OSPIRG Advocate Laura Etherton has authored a report (that’s her to the right talking to Governor Kulongoski) that outlines three strategies that would cut at least $5.4 billion in unnecessary costs out of Oregon’s healthcare system over the next ten years, while increasing the quality of care.
Those strategies are:
1. Cut wasteful practices and streamline processes that reduce costs and benefit consumers.

2. Increase Oregon consumer and small business purchasing power

3. Strengthening the state’s ability to watchdog excessive health care costs
        
See the back of this memo for more detail on each of these items, and the report for even more background.

CURRENT SITUATION
Governor Kulongoski took action on this issue during the 2007 legislative session, during which Senate Bill 329 was passed. SB329 created the Oregon Health Fund Board, a seven-member panel of concerned citizens from all around the state who would come up with a comprehensive health care reform plan.

The Oregon Health Fund Board and its staff conducted extensive research, studied other states’ models, and solicited citizen input to come up with a strong plan. Their first draft of the plan came out at the beginning of September. The Board then held ten “town hall”-type meetings all over the state to gather citizen feedback for a final plan. They will finalize the plan, called “Aim High: Building a Healthy Oregon,” during October, and in November it will go to the legislature to be placed on the 2009 legislative agenda.

For the last year, OSPIRG Advocate Laura Etherton has been working with the Oregon Health Fund Board to hammer out a plan that included our ideas.  At the same time, the OSPIRG chapters collected photo petitions to the Board, testified at hearings and generated media coverage of the issue.  And Laura’s research has been featured in the media and extensively reviewed by policymakers.

Our work is paying off.  The Board’s draft recommendations include most of our priority cost-cutting measures.   We are optimistic that the final report will be even better.

Moving forward, we are working to demonstrate student and general public support for cutting unnecessary waste out of the system.  We are organizing campus educational events, gathering comments from students and meeting with state policymakers about our approach.