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In The Oregonian, Michele Cole reports that, “Oregon Gov. John Kitzhaber has struck a deal with the federal government that is worth $1.9 billion over the next five years.”She adds:
Kitzhaber, who cleared this week’s calendar and flew to Washington Tuesday, announced an agreement with the Obama Administration on a new coordinated health care system intended to reduce costs but provide better care for the state’s 600,000 Medicaid patients.
A statement released Thursday morning from D.C. spells out the terms: An initial $620 million investment from the federal government to come in 2013, with $1.9 billion expected over five years. With the money and a new coordinated care system, Oregon expects to save $11 billion in the next decade.
The deal was crucial not just for the medical status of Oregon’s poor but for the state’s financial health. Without the deal and the infusion of federal money, Oregon’s budget for the next fiscal year would have exploded.
“If we didn’t get this, the (health care) providers would have been looking at another 30 percent cut and our Medicaid program would have started unraveling,” Kitzhaber said in an interview with The Oregonian before catching his flight home.
Despite a powerful mix of financial and political currents as well as unmovable deadlines and unexpected delays, Kitzhaber said he was confident a deal would be struck.
“I always believed we would get here because the program makes so much sense,” he said, noting that in return for $620 million in federal dollars in the next fiscal year Oregon promises to reduce overall Medicaid costs by 2 percent.
“Part of the lure for them is, not only is this a real life demonstration of what they’re trying to do at the federal level, but we’ve committed to improve health outcomes and reduce costs by 2 percentage points,” he Kitzhaber said. “So, at the end of two years if we haven’t made that reduction then we don’t get any more money.”
“This is a defining moment for health care transformation in Oregon, and the Obama Administration is a true partner in our efforts to reduce health care costs while improving care,” Kitzhaber said in the statement.