Despite the heat, Oregon’s health plan spent relatively little on air conditioners
When then-Gov. John Kitzhaber advocated for a restructuring of the state’s Medicaid system in 2012, often telling the story of an elderly woman with heart disease who lived alone without air conditioning.
On a very hot summer day, his condition worsened, he said, requiring an expensive trip to the hospital. Kitzhaber argued that allowing the state the flexibility to spend a few hundred Medicaid dollars on an air conditioner for the woman and others like her would save tax dollars and improve health outcomes.
The state now has the flexibility Kitzhaber wanted: The federal government allows Oregon’s health plan to use money for “health-related services” such as yoga class vouchers, blankets Weights and tablets for video dating that improve quality of life and health outcomes.
Air conditioners are also on the list, and they save lives. During this summer’s heat waves, 116 people died in Oregon, state officials said. Many did not have air conditioning or even a fan.
It’s unclear how many were on Medicaid, which insures low-income residents. A majority were elderly, according to reports. Some were passing through, indicating that they were on low income. This is the population covered by Medicaid.
Although the coordinated care organizations that administer the Oregon health plan, the state’s version of Medicaid, must report overall spending on health-related items to the state, the Oregon Health Authority does does not require details.
The authority does not want to discourage useful spending by increasing its administrative burden, said Philip Schmidt, spokesperson for the agency, in an email.
The health authority has no idea how many air conditioners have been purchased with Medicaid money. It also does not require cost-benefit analyzes, according to a guide on the agency’s website which describes restrictions associated with health-related spending.
The Oregon Health Authority only requires that these expenses be based on evidence-based medicine, said Schmidt, which includes widely accepted clinical practices and criteria set by medical associations.
“We set expectations and goals,” Schmidt said. “We provide CCOs with a flexible approach to use to meet expectations / goals. “
A new approach
When Kitzhaber and others revamped Oregon’s Medicaid program, they wanted to tackle factors that influence health outcomes but are not normally covered by insurance plans, Dr Bruce Goldberg said, former director of the Oregon Health Authority. The “social determinants of health” include factors such as the environment, employment and education. Regular exposure to polluted air, for example, being homeless or eating unhealthy food can have a big impact on health.
Oregon’s health plan was also designed to keep costs under control through creative spending, like buying air filters, for example.
“We were looking to lower health care costs by providing better care,” said Goldberg, currently a professor in the School of Public Health led by Oregon Health & Science University and Portland State University.
The plan, which gained federal approval thanks to a departure from traditional Medicaid rules, gave the newly formed coordinated care organizations the ability to spend relatively small amounts of money to combat the social determinants of health. The idea was to reduce emergency room visits and hospital stays. Hospital expenses are the most expensive medical care.
Focusing on prevention, like buying an air conditioner for an elderly woman living alone, is a good example of profitable health care spending, Goldberg said.
Under the waiver, the Oregon Health Authority is required to produce measurements showing it is producing better health outcomes. Goldberg said these measures show that is the case.
the most recent report The evaluation of the performance of coordinated care organizations in 2019 shows that they are achieving many fundamental objectives.
Fewer adults on Oregon’s health plan were readmitted to hospital within 30 days of a recent stay. In 2019, 10.5% were readmitted against 11.1% in 2018 and 12.9% in 2011.
Fewer people used emergency departments for problems that could have been treated with primary care. In 2019, 66% of adults on the plan rated their health as good to excellent, up from 56% in 2011.
Fraction of the overall budget
Spending on health-related items is a fraction of overall Medicaid spending in Oregon. The state’s Medicaid budget is approximately $ 9 billion per year and now has approximately 1.3 million members. In 2019, coordinated care organizations spent $ 16.2 million on approved health services, according to Oregon Health Authority figures.
Coordinated care organizations themselves spent more than $ 36 million on health-related items in 2020, according to their financial reports to the Oregon Health Authority.
A draft status report on Oregon Medicaid spending at the Federal Centers for Medicare & Medicaid Services shows that the most money was spent on housing: $ 77 per thousand members in 2018 and $ 92 per thousand in 2019. Spending on household items, which include air conditioners, air purifiers and filters, was only $ 11 per thousand members in 2018 and $ 25 in 2019.
Jackson County Care Connect, which insures more than 30,000 people under the Oregon Health Plan in Jackson County, spent $ 122 per thousand members on household items in 2019, more than any other coordinated care organization . Health Share of Oregon, which insures more than 385,000 Medicaid members in the Portland area, spent $ 26 per thousand members in the same year.
The Lund Report asked Oregon Co-ordinated Care Organizations how many air conditioners they purchased for members to protect them from the heat. Only a handful responded, and most could not provide a number.
“I’m not in a position to slice the data on air conditioners,” Becca Thomsen, spokesperson for CareOregon, which assures members of the Portland area, said in an email.
PacificSource, which insures more than 200,000 Medicaid members in central Oregon, Lane County, the Columbia Gorge area, and Marion and Polk counties, purchased just 13 air conditioners in 2020, at a cost of over $ 4,000, according to Erin Fair Taylor, vice president of Medicaid Programs. PacificSource has purchased 11 AC units so far this year, spending less than $ 3,000 (there were no costs for three units yet).
Fair Taylor said that when providers request an item like an air conditioner, PacificSource’s care coordination staff take the member’s underlying conditions into account when determining whether to approve it. She said all requests for air conditioners have been approved.
State regulations require that health-related expenses be consistent with a member’s treatment plan. Suppliers must also apply. Fair Taylor said all requests for AC units have been approved.
But air conditioning is at the bottom of the list of items requested by providers.
Thomsen said CareOregon is receiving more requests for help with healthy food or for assistance with rentals or transportation. Last year, tablets and phones for telehealth appointments were in high demand, Thomsen said.
Health Share also has a range of requests.
“The needs of our members are not limited to air conditioning units to help them stay safe and healthy,” Health Share spokesperson Jeremy Graybill said in an email. “In addition to air conditioning, they may need help with utilities, bills, electricity, installation, etc.
Josh Balloch, vice president of AllCare Health, which covers more than 60,000 members in Curry, Jackson and Josephine counties and part of Douglas County, said it was not always easy to equip members of AC units. The coordinated care organization should check if a member’s home has the electrical load to operate it or hire electricians and carpenters to install it properly. Sometimes a homeowner who is worried about leaks will not allow an air conditioner to be installed.
And it may make more sense to offer a member a hotel or a ride to a cooling center during a heat wave, Balloch said.
More flexibility sought
State officials are currently working on Oregon’s request for its next five-year Medicaid plan. The app could give Oregon even more flexibility. Balloch said he hopes coordinated care organizations will have more leeway to build housing and other infrastructure for those in need.
“It’s much bigger than an air conditioner,” he says.
Although spending on AC units may increase.
In the aftermath of the June heatwave, the Oregon Health Authority sent a note to coordinated care organizations asking them to take a more proactive approach during episodes of extreme heat. He recommended using hospital records to identify and help members who may have conditions that make them particularly vulnerable during heat.
As temperatures exceeded 100 degrees Fahrenheit in July, Fair Taylor said PacificSource looked at its data to identify vulnerable limbs. She said PacificSource contacted them to make sure their medications were refrigerated or to see if they needed to go to a cooling center. PacificSource has also expedited all heat-related requests from members, she said.
Graybill said Health Share has been carrying out similar outreach activities and speeding up the process of getting cooling units, ice and fans for members. He said the process can be confusing for members and they don’t know enough about this benefit.
You can reach Jake Thomas at [email protected] or on Twitter @ jakethomas2009.