(Update: St. Charles statement on OHA findings)<\/p>\n
BEND, Ore. (KTVZ) — An Oregon Health Authority report released Monday said costs for insured patients at Central Oregon’s St. Charles Health System jumped 26.3% in 2023, well beyond the state’s target limit of 3.4% health care spending growth a year.<\/p>\n
The OHA says St. Charles and four other health care entities around the state did not provide an acceptable reason for their large cost increases, so St. Charles and two others must provide performance improvement plans.<\/p>\n
St. Charles officials told KTVZ News later Monday that they will ask OHA to reconsider its decision and explained that many of the factors in the large price increases were beyond its control.<\/p>\n
Here’s OHA’s full news release on the findings; followed by the full statement provided by spokesperson Alandra Johnson:<\/p>\n
Seeking\u00a0health affordability,\u00a0 OHA finds five organizations\u00a0didn’t\u00a0meet\u00a0acceptable\u00a0cost growth standards\u00a0in 2023\u00a0<\/strong><\/p>\n SALEM, Ore. \u2013 In support of its efforts to make care more affordable, a detailed review of statewide health care spending data led Oregon Health Authority to determine most of the state\u2019s health care organizations had acceptable reasons for high cost growth in 2023. However, OHA also\u00a0found<\/a>\u00a0five entities didn\u2019t have an acceptable reason for their spending increases that year.<\/p>\n For the first time, OHA will require three organizations to develop plans to meet the state\u2019s health care spending target. In a related analysis, OHA also found\u00a0compensation for frontline health care workers grew slower than for others who worked for Oregon hospitals and medical groups in 2023.<\/p>\n \u201cMaking health care affordable benefits everyone: People can more easily maintain their health, employers can better support their workers, and the health care industry can serve more members of their communities,\u201d said OHA Health Policy & Analytics Division Director Clare Pierce-Wrobel.<\/p>\n \u201cAs directed by state law, OHA\u2019s Sustainable Health Care Cost Growth Target Program provides additional transparency into what the state spends on health care,\u201d Pierce-Wrobel said. \u201cIn the few cases where OHA finds cost growth is unreasonably high, the program follows thoughtful and gradual accountability standards. When the state, insurers, hospitals, providers and others work together, we can make health care affordable and accessible for everyone in Oregon.\u201d<\/p>\n Health care costs in Oregon and around the country are rising at an alarming rate, outpacing wages and making care unaffordable for working families. Rising costs also strain the budgets of businesses and government agencies that pay for employer health coverage. In addition, reduced federal support for Medicaid and Affordable Care Act health plans is expected to further increase costs by causing people to lose coverage and avoid care until they need more expensive emergency care.<\/p>\n Measuring spending<\/p>\n Each year, OHA\u2019s\u00a0Sustainable Health Care Cost Growth Target Program<\/a>\u00a0collects and analyzes data from health insurance companies and other sources to measure what people and organizations in Oregon spend on health care. The program has aimed to limit health care cost growth to a 3.4% average annual increase per person since 2021. The Oregon Legislature established the program to help control health care spending.<\/p>\n While evaluating how spending changed between 2022 and 2023, OHA found most entities had an acceptable reason for higher-than-hoped cost growth, including for things like increased frontline workforce costs, high drug costs or increasing services to meet growing community needs. <\/p>\n OHA made a total of 120 comparisons between insurance plans, hospital systems and medical groups while examining how those organizations spent while serving people with commercial, Medicare Advantage and Medicaid coverage. These comparisons led OHA to determine three insurance plans, one hospital system and one medical group did not have an acceptable reason for spending more than the state\u2019s target.<\/p>\n The following five entities were found to have unreasonably high health care cost growth in 2023:\u00a0<\/p>\n Improvement plans<\/p>\n The 2022-2023 measurement period marks the first time that OHA can require organizations to submit performance improvement plans if their high cost growth didn\u2019t occur for an acceptable reason. OHA is requiring three of the above organizations \u2013 St. Charles Health System, UHC Company and PacificSource \u2013 to submit plans.<\/p>\n As allowed by state law, OHA is excusing two others with unreasonable cost growth. ModaHealth\u2019s Medicare Advantage insurance plans don\u2019t need to submit an improvement plan because they are no longer offered. OHA is also excusing The Corvallis Clinic this year so it can focus on holding its parent company, Optum, accountable in future measurement periods.<\/p>\n The organizations\u2019 performance improvement plans must identify what is causing their high cost growth, name actions they will take to address those cost drivers, and provide a timeline by which their cost growth will be reduced. OHA must approve the plans, which will be due by the end of January 2026.<\/p>\n Starting in 2028, OHA can begin issuing fines to health care entities that consistently fail to meet the target in three out of five years. By design, the Cost Growth Target Program does not immediately penalize an organization for their high cost growth in a single year or two, even if it is determined to be unreasonable. The program may only penalize organizations that fail to meet the cost growth target \u2013 without an acceptable reason \u2013 three times in a five-year period.<\/p>\n Workforce costs\u00a0<\/p>\n Because workforce costs are a significant driver of health care spending and OHA considers spending on frontline workers an acceptable reason for exceeding the state\u2019s health care cost growth target, OHA has also published a related\u00a0report<\/a>\u00a0that examines frontline worker compensation at a subset of the hospitals and medical groups that are subject to the target.<\/p>\n Frontline health care worker compensation recently grew at a slower rate than compensation for others who work at hospitals and medical groups, concludes the report. Frontline worker compensation grew 3.3% in 2023, compared to 13.0% for non-frontline workers. Further, frontline worker compensation represented 60% of total compensation in 2023, down from 62% in 2022.<\/p>\n\n