What the CareOregon, SCAN Health Combination Means for Oregonians


Eric Hunter, president and CEO of CareOregon, and editorial advisory board member of Managed Healthcare Executive, talks with MHE about the “combination” underway between CareOrgeon and SCAN Health and how it's a good thing amid the concerns it would make CareOregon less responsive to local needs. Hunter also talks about how the combination will affect how they manage pharmacy benefits, and what else is on their radar in healthcare.

The below is edited for clarity and length.

Q: Amid the concerns of the CareOregon and SCAN Health combination taking away from local care, why is it a good thing for Oregonians?

A: One of the things that we've tried to do in putting this combination together and how we've structured the deal is that our first goal was to maintain the ability of Oregonians to make decisions on what's best for Oregonians.

So that's why the CareOregon board will continue to exist, will continue to set the strategic goals, do strategic planning for Oregon, start the budget approval process for Oregon. That will happen at the CareOregon board, even after a combination closes. Our relations with our coordinated care organizations will stay exactly the same, they will continue to have their own boards of directors and managing their affairs as subsidiaries of CareOregon.

We're actively maintaining those local governance relationships, because the closer you get to the member, the better you understand what their needs are. We're not saying nothing wil change for u, but I think there'll be things that are transparent, as much as possible to the members and providers.

Q: Will your combination with SCAN affect how you manage pharmacy benefits?

A: There's a chance, I think, because of the fact of where we (CareOregon) are in the process. We can't talk about SCAN, but we do know that we've got a great relationship with Optum, who we use right now. But again, as big as we believe we are in Oregon, in the Optum world were an afterthought. They do their best to support us, but I think that conversations that you have with any entity, that's a vendor or downstream and brings an organization with revenues of $7 billion, 2,700 employees, is a different conversation than $2.5 billion and 1,300 employees.

I would suspect that there will be opportunities for us through greater scale and geographical reach to talk to the current vendors or potential other vendors about what's the best way to provide value.

Q: What else is on the radar for CareOregon?

A: I think one of the most immediate (priorities) is obviously sort of lighter weight as Medicare rules and some of those changes. We have a lot of really high acuity members and so making sure that they're coded properly is important to make sure we can provide the services they need.

The big thing we're watching is that for the longest time, Medicaid has not necessarily been high payments to providers and downstream. But when you look at the fact that Medicaid is now really the largest insurance program in the country, there's a lot of money in Medicaid, and a lot of the big players know that Oregon, in particular, is very generous in supporting our people in our state. (The big players) are looking at Oregon. For example, Humana has decided to go all in on Medicare Advantage. That's a direct challenge to us. It puts a little more emphasis on us talking about deals like we're doing with health. We will never be able to go toe-to-toe with those entities, but if we need to bid on our own, even to keep our own programs, (we will).

We're proud of the work we do. We think we do it better than anybody else, frankly. Now, I'll put that up against any other human safety net health plan across the country. Though, there are limits to what you can do, it's more challenging, so we're watching them. That's one of the things that says, "Let's get this on the road," so we can start building that infrastructure that lets us fight to compete, to serve the most vulnerable.

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