Oregon CCOs' for-profit status raises questions, concerns
Yet 10 of the 16 CCOs are for-profit companies, and there are no limits placed on how much profit they can make.
"I'm not aware of any (caps on profit) -- not by virtue of regulation or any other type of guideline," said
These two facts have drawn increased attention -- and concern -- after a Fortune 500 company based in
"It does concern me when we have a private business, whose main motive has got to be to make money, running a service that is really critically important to low-income
There doesn't seem to be a definitive answer as to why profits aren't covered by the state's rules for CCOs. But several sources interviewed for this story said they were surprised to discover that most of Oregon CCOs are for-profit companies.
CCOs manage health services provided to members of the Oregon Health Plan --
The spotlight focused recently on the ownership of CCOs when the state Insurance Division decided to approve the sale of privately held Trillium to
In public comments on the sale, dozens of health care providers, Oregon Health Plan members and lawmakers told the state they were worried that taxpayer money intended to pay for health care for needy Oregonians could end up enriching corporate executives and shareholders.
Sen.
"It's a new area with the CCOs, so I think it's something we should be looking at to ensure the public is getting (quality) coverage at a reasonable cost," he said, and that systems are in place to provide accountability -- a way to measure whether goals are being achieved.
In theory, the limit on CCOs' profit was that they had to provide access -- services to all eligible Oregonians -- at the same time they met a range of performance benchmarks, said
"Usually the idea is there aren't explicit profit controls, but ... if there are controls on quality and access, then they can't really make a profit," he said.
But all of
CCOs are a relatively recent creation. They were rolled out in 2012 with hopes of improving services and improving members' health at lower costs. They aimed to do this by wrapping together physical, mental and dental health services, which previously had been managed separately, and by encouraging innovation, such as hiring community health workers to help patients in their homes.
As the state's CCOs have enrolled more members, their revenues -- and in many cases profits -- have increased.
Trillium, which oversees
Trillium reported a profit of
Trillium CEO
The reason for CCO profits early on is that people have coverage they're not using yet, said state Rep.
Most of the CCOs brought on a lot of people, Lively said. "They're paid per covered life," he said. "As utilization goes up the payment will be the same, but their costs will go up. That's the point of putting more in reserves, so they have enough to cover increased utilization."
Enter
The final purchase price will depend on the size of the dividend paid to Trillium owners before the sale closes, which is set for
Trillium has 217 shareholders; 200 of them are retired or practicing doctors and most of the rest are Trillium employees, Trillium spokeswoman
Some of those shareholders will get big payouts from this deal, which rankles some OHP patients.
"I don't think that people's health care should be big business," OHP member
"Then (to) have people making
Peggy, an OHP member who asked that her last name not be used because she said she feared being blacklisted by Trillium, said the scenario of Trillium owners making millions of tax dollars off Trillium patients "just feels wrong; it feels messed up."
What's even more messed up, Peggy said, is that the doctors and executives who own Trillium will profit from the
Peggy said she is in fragile health and lives on about
Peggy said Trillium has told her she can visit two different specialists, if needed, and can go to urgent care for any problems that crop up. But she said she hasn't been able to find a doctor to fill her prescriptions, her OHP dentist performs the lowest cost procedures, such as pulling a tooth instead of doing a root canal, and OHP won't pay for eyeglasses, specialized crutches or a new wheelchair.
Peggy said she is irked that "my teeth are getting pulled; I can't get eyeglasses, and I can't get a new wheelchair, and meanwhile they're making millions of dollars. What is right about that?"
Two of the more than 30 CCO performance measures tracked by the
Last year, 86 percent of Trillium patients surveyed said they received needed help and were treated with courtesy and respect by customer service staff. That's up from 84 percent in 2013, but below the OHA benchmark of 88 percent.
Separate from the performance measures, OHA also tracks complaints against CCOs.
In the first three months of this year, Trillium CCO members filed 306 complaints against the company, according to OHA records. A third of them dealt with interactions with health care providers or the plan. The next biggest areas of complaint were access to providers and services, followed by clinical care.
The Health Authority denied The Register-Guard's request for access to the individual complaints, saying that doing so would violate patients' privacy. The Register-Guard has filed a public records request asking for the information, which is pending.
Trillium, with 3.23 complaints per 1,000 members in January through March, had the fifth-highest rate of complaints among the state's 16 CCOs.
Health Share of
A growing number of states have contracted out management of
"It's a way of controlling risks," said
"They're offloading risks to managed care companies," which agree to take on the financial risk and potentially the financial benefit, he said. "It makes states able to manage their budget more carefully."
The managed care companies "are betting they can manage that patient population better than the state can," McConnell said. "But if they can't, it comes out of their pocket."
Wallace, the PSU professor, said the tension around the government outsourcing this type of work "has always been there."
"I think it becomes more prominent when it's a for-profit because that's sort of calling out that they have this particular motive," he said.
Now, with
It's one thing if an Oregon CCO wants to partner with a national company to tap into the larger company's expertise, Wallace said. "It's another thing if they're selling the whole thing because ... without the public (
"Are the contracts strong enough that the person contracted to do the job are doing all the things they're supposed to do?" Neal asked.
Fairbanks, the OHA's chief financial officer, said they are.
"We have contracts with each CCO and make sure that all requirements are being met," he said.
CCOs are measured on more than 30 performance metrics, and they must submit quarterly and annual financial statements, he said.
"At this point it appears Trillium is in compliance with its contract and certainly is satisfactory," he said.
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