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Oregon Coordinated Care Organizations prove cost savings


Oregon is the first state to transfer Medicaid populations into accountable care.


The state of Oregon has taken the leap and moved its entire Medicaid program into a system of regional Coordinated Care Organizations (CCOs). Considered accountable care organizations, CCOs integrate traditional outpatient and inpatient care, mental health, addiction services, social services and even competing managed care groups, into a medical home model with a single per-patient budget.

Oregon appears to be the first state to transfer its entire Medicaid population into CCO coverage, and experts say one-year results look good.

Primary care utilization increased by 18% and primary care spending by 7%, while emergency department utilization fell by 9% and emergency department (ED) spending by 18%. Hospitalization for congestive heart failure fell by 29%, chronic obstructive pulmonary disease by 28% and adult asthma by 14%.

Thirty-day readmissions following discharge fell by 12%. The overall rate of Medicaid spending growth is down by more than one percentage point, exceeding baseline goals set by the Centers for Medicare and Medicaid Services (CMS).

Erin Fair Taylor“We are still early in the experiment,” says Erin Fair Taylor, director of CCO partnership and development for CareOregon, a managed-care Medicaid organization that is funding and coordinating regional CCOs across the state. “We are starting to see patterns of primary care utilization increasing as ED and hospital utilization drops, but we are still hesitant to draw a causal link. The medical home model may be helping prioritize our efforts to focus on our highest utilizers and divert them to more effective and more cost-effective utilization patterns.”

CareOregon, a not-for-profit plan, has long advocated for medical homes and brings primary care physicians together frequently for learning labs and the exchange of best practices.

High utilizers

The Oregon CCO program focuses on the 20% of Medicaid recipients who account for 80% of spending. They are typically individuals with dozens of ED visits and multiple hospitalizations every year.

The goal is to move these high utilizers, along with all other Medicaid patients, into primary care medical homes where providers can focus on chronic and preventive care. Advocates say the expected result is better patient outcomes, increased utilization of primary care services, lower utilization of ED and hospital services and lower overall spending. 

A pioneer in accountable and integrated care, the Oregon CCO program is modeled on “hot-spotting.” Using ED and hospital admission records, care specialists identify individuals with the highest utilization-the hot spots-then work on the root causes of the high utilization by focusing on the patient’s total health status, not just medical issues.

Rebecca RamseyHot-spotting starts with the recognition that medical care is responsible for only about 10% of a patient’s overall health status, says Rebecca Ramsey, BSN, MPH, director of community care for CareOregon. The other 90% is linked to socioeconomic issues, nutrition, social environment, living arrangements and other nonmedical factors that are beyond the control of clinical providers.

“We have deployed ‘health resilience specialists’ into the primary care process to work on those nonmedical factors that physicians may recognize but can’t do anything about,” she explains. “It is a very intentional engagement strategy.”

For example, the specialists might go grocery shopping with a diabetes patient who keeps coming into the ED, and might even teach her how to cook, to improve her nutritional status and reduce ER usage.

“Our governor likes to talk about the example of buying an air conditioner for a congestive heart failure patient to keep him out of the hospital when the temperature goes up,” she says. “An air conditioner isn’t your typical Medicaid intervention, but it makes sense to spend $200 on an air conditioner and prevent a $100,000 hospitalization. It only takes preventing one or two hospitalizations to start showing significant cost savings.”

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