Our 2026 conversation with Eric C. Hunter, MBA, president and CEO of CareOregon, part 1

Eric C. Hunter, MBA, has been president and CEO of CareOregon, the largest Medicaid managed care plan in Oregon, since 2016, and became a member of the Managed Healthcare Executive (MHE) editorial advisory board in 2020. We have checked in with him periodically during his time on the board.

Peter Wehrwein, managing editor of MHE, conducted this interview.

The transcript was edited for clarity and length.

Here we are at the still relatively fresh part of the year. Maybe the New Year's resolutions have already worn off. So this seems like a good place to start: What are the two or three challenges you and CareOregon are facing in 2026 — the big, looming problems?

When we look at the challenges that we're planning for, the one that's most challenging is the growing challenges of providing services for substance use disorders, behavioral health and complex care needs. The core benefits, doctors and hospitals, and all that — that tends to work on its own. That's a system. It’s defined. We understand it better. We know how to fund it, even if the providers don't always love the number. But substance use disorder is still just out of control — understanding the utilization, the different levels of care needed and trying to serve people in a system that has been historically underfunded and not necessarily designed to move people through a system and series of recovery. It's meant for episodic care. We get them off the streets and get them to [the emergency room]. But then what happens? We get them into the state hospital, but what about the step-down?

It's that kind of system that doesn't fully exist in a way that lets us get ahead of the curve and deal with those folks that are driving a predominant percentage of the care needs in the Portland metro area. We have worked with our partners at Health Share of Oregon to develop a pilot project that started even before we got the waiver benefits for housing. It identified a cohort of members that had substance use disorder issues, behavioral health issues and were houseless, comparing their needs and their costs to the system to the core population. The folks who had all three of those flags were literally costing 18 times what those folks who just had two of them were. A small 9% of the population was driving over 20% of the costs. Those are the kinds of things that the system has to be designed differently to address, so that's the biggest challenge.

But a lot of that comes back to the second thing, which is funding. The system, I still contend, in the aggregate — there is enough money in the healthcare system. It just doesn't go to the right places. We can get into what those are. But there are pressures from the federal government from things that are still coming down the road, and we've had challenges financially for the last two years, at least here in Oregon, that we're still trying to recover from.

The third challenge, which underpins all of that, is a systematic erosion of scientifically defined needs in the system. Understanding the impacts of removing Planned Parenthood from my network, for example. That is real. The dismantling of DEI [diversity, equity and inclusion] programs so that we can target populations who have been traditionally left behind. Social determinants of health work that we try to do — the housing pilot, the climate change pilot, nutrition — those kinds of benefits, the work we've done to build up structures to try to head off long-term spend — are being dismantled. It's penny-wise and pound-foolish. Those are the areas that are top of mind for me.

Just one quick clarification. When you said 9%, is that 9% of your substance abuse disorder population, or is that 9% of your whole population?

Nine percent of the whole population.

Speaking about behavioral health, do you have a series or set of services that you have costed out in the way you have for other areas of health? A pregnancy. It’s sort of predictable. You know the costs. You have contracts with providers. But behavioral health seems less settled.

There is a system, and we know what's needed, but then that gets back to how do we pay for it? We recognized that the COVID-19 pandemic amplified the need for behavioral health treatment, just sort of core, basic outpatient behavioral health treatment. Oregon got very aggressive. The state invested $1 billion into the behavioral healthcare system. CareOregon invested about $200 million into building capacity into the system. The state also raised behavioral health rates by 30%, which brought more people into the business. It even opened up the provider panels to people who were unlicensed to be able to increase access. We really invested in all that stuff. It worked, but it blew the doors off the funding system because so many people came in to take advantage of those systems that the state hadn't prepared to pay the organizations to manage that for them.

But the next phase, that really is challenging us more. Now that we've identified all these people and their needs, the infrastructure doesn't exist — the systems and the providers for people to get into the proper level of care. We can identify people, whether it's for behavioral health or substance use disorders, that are on the streets that need immediate help, and we can get them somewhere, into an [emergency room], or get them into some sort of day program. But then what happens to them? That next level doesn't exist. And so they go back to the streets. Or they're in the state hospital or incarcerated, and when they're released, that step-down level doesn't exist.

The problem now is, how do we build in an entire sort of continuum of care, and is that the responsibility of managed care companies? We don't employ providers, and if they don't exist, who provides the infrastructure to build them up, because we won't start paying them until they're actually there and seeing patients? That's really the biggest challenge.

As you say, you can't create providers to fill in that gap. How are you coping with that? Or have you identified a problem, and state officials and other people are working on solving it?

I think there are some solutions that we've put forward. At CareOregon, we talked about engaging people differently. We worked with Portland Fire and Rescue about four years ago now to create what's called the CHAT [Community Health, Assess and Treat] program, which funded the creation of a unit within Portland Fire and Rescue so that when someone calls about people with primarily behavioral health issues, instead of having to send a fire truck and an ambulance to them, we send out two technicians with a trauma nurse on the phone to get them in the right level of care and address them properly, which saves the city money by not rolling out all those resources. We connect people with the right level of care. That was something we rolled out, and now it's being fulfilled without our money.

The other thing is the ecosystem work that I talked about with Health Share of Oregon. We've defined the progress that we've made in much reduced spending for those people and better outcomes for those individuals. But in the aggregate, it cost us more to manage it than we were saving because we were having to do housing and those things now.

We're talking now to community partners, to the city and the county, and the metro departments, the state about how we define societal advantages of that work. We knew what it meant to healthcare spend. But what does it mean to the jails, to the police departments, to the schools, to say, “Hey, if we realize the savings for multiple areas of society, then there is a value add,” and then it's easier to pay for expanding that kind of work?

That's the work we're doing right now, because everybody's tightening their belts now. It’s tough to have people free up monies to create new programs from scratch, so we've got to really do a good job of defining the value in not just the healthcare spend but the entire society.

Are you narrowing your network of behavioral health providers?

At CareOregon, we've almost exclusively been what could be defined as any willing provider. If you see one of our members, and you're licensed in the state and have a contract with Medicaid, and you send us a claim, we've traditionally just paid it.

One of the things that these financial times have allowed us to do is rethink some of that. While it is great to have as much access as possible for our members, we also were doing them a disservice at times because the providers, particularly in behavioral health, some of them were unlicensed, didn't have a lot of history and didn't have access to full, whole-person systems. They might not be able to identify when a person needs higher-acuity services, but they'll see them every day for talk therapy and bill for that.

But if they're part of an organized group or a clinic that has the entire spectrum, that could deal with social determinants of health and deal with SUD [substance use disorder] issues, those kinds of things, they're on a road to recovery. So our efforts were really to say, ”Look, it's not just about cutting people out of our network.” It wasn't based on cost or anything like that. It was based on how we get people into patterns of care that can support them most appropriately, and how do we have folks that are going to contract with us so that we can have cooperation on care management, authorization rules and those kinds of things — and coordination of care — as opposed to just anybody who sends a claim in. That was really a lot of the work we've done.

It caused some consternation, but we've made that change and have had very few complaints. We went out of our way to coordinate transitions for those members that were impacted. The rest of our network had capacity to see them and even welcomed it, because when folks would not go to the main clinics, their volume went down. I think we've supported the whole system, and we're encouraging those folks to either get licensed, contracted or join one of those clinics, because we do value their contribution to the care.

Is this a period of belt-tightening for CareOregon? I read that you laid off some people last year, about 80 people, and that you are not filling a similar number of positions. Are you seeing areas of further staff reductions and, along with that, perhaps some areas where staffing is growing?

We did, last year, have a round of sort of voluntary separations. We [made offers to] folks in certain positions that we deemed could be lived without — they're good people, doing great work — but as we redefine the work we do and priorities, we realize that we could separate from those folks and not diminish the care we provide.

We did follow that up a few months later with an involuntary separation program, but even that was not defined by “let's find a number to save and pick a number of people and then do that.” We're constantly — and it's more on steroids now — evaluating the work we do, how we're organized, how we prioritize our spend, and we've identified places where we're overstaffed for what we're now defining the work to be. That will continue.

We don't anticipate large, programmatic changes. But as we continue to refine, department by department, what are the initiatives we need to push forward to serve people better, to support our providers, to get the work done? How can we be more efficient? If we identify that we don't need to backfill positions, or we don't need to fill positions, or entire departments may move, we'll do that.

But we’re not saying, hey, we need to cut X number of FTEs [full-time equivalent employees] because our challenges are not driven by administrative spend. Our admin is higher than we'd like it, but when we're running a member-benefit ratio of 105, I can't admin my way out of that. Our focus has been more on provider value-based contracts, utilization management, payment integrity.

But we have a history of going above and beyond and doing things in our communities. And that's how I motivate the staff to say, “We have to make these changes. We have to be more efficient. We have to be more deliberate about the work we do so that we have the resources available to buy The Red Lion Inn in Seaside [Oregon] and turn that into supportive housing to start the CHAT program with $6 million of CareOregon money.” Those kinds of things are funded by the extra we have from being efficient. And so that's what we're trying to get back.

Interesting. Is your hand being forced in some of these areas because of federal government policy, such as you can't spend money on social determinants of health and DEI? Are some of your staffing challenges coming from outside, exogenous forces, as the Trump administration sets priorities?

Those pressures aren't reducing staff for us yet because we have a contract with the state of Oregon. Even in our Medicare Advantage program, nothing has rolled down which says that “thou shalt not.”

It’s actually caused us to hire more people in some areas because there is a greater need for traditional health workers in the community. There's a greater need for us to support translation services and navigation services for some of our members, particularly in our immigrant communities, where folks are afraid to leave their houses. They're afraid to go to the doctor or the hospital. They're afraid to pick up their prescriptions. So we have to develop systems to wrap around them, working with community organizations to say, “How do we make sure people who are deserving of these benefits get those benefits and stay healthy?”

If anything, right now, it's had us actually increase staffing and make some changes. But for a lot of our community partners, it's very different, particularly the language around diversity and equity. There are a number of them that are in the quandary of knowing that for federal grants and funds, they have to take language like that out of their charters and bylaws, but for the state of Oregon, they have to have it in there.

Those are the kinds of challenges that states like Oregon are facing. We are steadfast in Oregon on, first and foremost, supporting our people. That's why I believe our attorney general has probably sued the administration more than any other to try to maintain our ability to serve the population the way we see fit. That’s a battle that we are very much interested in following but obviously can't engage in directly, but we will support our members.