You don't have to dig deep to find signs of a health care crisis -- in Oregon and nationwide.

The cost of medical care -- from doctors' exams to high-tech diagnostic procedures to hot new prescription drugs -- is soaring. The Oregon Health Plan -- still admired far and wide for its ambitious attempt to provide all poor Oregonians with coverage for a limited range of essential medical care -- is under financial stress; many providers refuse to see OHP patients because of low reimbursements. There are 470,000 Oregonians without insurance, many of them in working families that don't receive coverage from their employers. Employers that do cover health insurance, meanwhile, are paying 14% more for premiums than they did a year ago, after years of double-digit increases; the typical family plan now costs more than $9,000.

Where to go from here? Oregonians have never been shy about seeking solutions. We've gathered a few promising -- and provocative -- ones here.

Doctors-turned-medical entrepreneurs Albert DiPiero and David Sanders are pushing a ballot initiative -- HealthOregon -- that would get employers out of the health insurance business entirely, mandating universal coverage through a state-administered system and reining in runaway medical inflation. Regence BlueCross BlueShield of Oregon, led by Mark Ganz, is on a quest with its new BlueChoices plan to preserve the current employer-driven system and control costs by empowering medical consumers. OHSU's National Center of Excellence in Women's Health, headed by Michelle Berlin, is leveraging the extensive expertise at that institution to improve the quality and accessibility of care for women. Former Gov. John Kitzhaber, father of the Oregon Health Plan, is zeroing in on the crisis of the uninsured. The Salem chapter of Stand for Children, a national grassroots advocacy group, has enlisted volunteer dentists to deliver emergency care to poor children in a program that could be replicated nationwide.

The challenge of change is awesome. Just take HealthOregon and BlueChoices. Health care consultant JD Kleinke of Health Strategies Network in Portland says the two plans represent the fundamental split between liberals and conservatives in America, with one side believing the market ought to decide the level of care, while the other believes the market has failed and everybody has the right to the same level of care. ³We're at an absolute stalemate philosophically,² he says. ³It's the single most unsolvable debate in this country.²

Given past performance, though, if any state can find a way forward, Oregon can.

The universal solution

WHO: Dr. Albert DiPiero, 38, is an adjunct assistant professor in the department of medicine and former medical director at OHSU's health center in Tigard. Dr. David Sanders, 38, is a general practitioner. They're also business partners in two successful medical startups.

WHAT THEY HAVE DONE: DiPiero and Sanders founded Salu.net and MyHealthBank, both startups in the medical information field that provide Internet-based services for physicians and the pharmaceutical industry, and self-service and savings account software systems for health insurers. The doctor-entrepreneurs took a one-year break from full-time private practice last year to research and refine their plan -- HealthOregon.

THEIR BIG IDEA: To provide universal health care administered in a competitive market-based system that reins in medical costs. DiPiero and Sanders believe health care costs will become untenable because of medical inflation, which is rising at more than three times the rate of general inflation. Medical advances feed the problem by encouraging the most costly technology to be developed and deployed. ³Right now providers don't have to compete on price or quality and consumers have no reason to be judicious. It's a stimulant to unrestricted medical inflation,² says DiPiero.

HOW WOULD IT WORK: HealthOregon would cover all Oregon residents for 100% of preventive care, pay providers 70% of health care bills (with the patient paying the remainder), and provide 100% of coverage for low-income Oregonians. Enrollment would be mandatory, there would be no exclusions for pre-existing conditions, and Oregonians could not lose their coverage. The program would be administered by the state, rather than insurance companies, and it would be funded through a 7.75% payroll tax on employers, income-adjusted member premiums and Oregon's Medicaid funds.

Providers would be paid a "fee for solution" -- a consolidated fee for all services needed to make and treat a given diagnosis. The plan would reimburse them at 70% of the median price for each diagnosis, thereby encouraging providers to be price-competitive. Consumers could choose their provider and would pay 30% for each treatment up to an income-adjusted annual maximum -- more than many consumers pay now -- to spur greater cost consciousness. Patients would also be liable for costs above the median price of each treatment.

DiPiero and Sanders project that HealthOregon would reduce medical inflation from 7% to 4% annually, generating billions of dollars in savings for businesses, taxpayers and state government. Everybody would be insured, businesses would have a simple, stable plan, and providers would have an understandable system that allows them to set their own fees.

THE MAJOR PITFALLS: Several medical experts and practitioners who have looked at the plan are skeptical about the proposed cost savings.

Ken Rutledge, president of the Oregon Association of Hospitals and Health Systems, says that there would be huge pressure to provide everything to everyone, and there aren't the finances to do that. Stephen Gregg, a health care reform leader, says that HealthOregon's formula for reimbursement would likely break down. If health care costs continued to increase, the payroll tax wouldn't be adequate, and the state would face a shortfall. But, politically, it would be hard to raise more revenue. "When the 7.75% is cast in law, it will be resistant to change," particularly considering Oregon's anti-tax climate, he says.

WHO'S LIKELY TO OPPOSE: Insurance companies would be largely cut out of their business, except to provide for people who opt out of HealthOregon. Businesses would have a difficult time absorbing the payroll tax, says Gregg, and businesses that don't currently provide health insurance would be liable for a new tax. The reimbursement mechanism for physicians and providers hasn't yet been proven to work, so providers are likely to be wary of it, says Gregg. Charles Kilo, a doctor and CEO of Greenfields medical practice in Portland, believes the public would also be skeptical. "Americans are suspicious of anything that smells of government regulation."

WHAT'S NEXT: HealthOregon needs more than 75,000 signatures to get on November's ballot. Then DiPiero and Sanders have to convince folks to vote yes. "In the end it's up to individual Oregonians to support this," says DiPiero. "It's their money and their health."

Empower the patient

WHO: Mark Ganz, 43, is president of the Regence Group, which includes affiliated health plans in Oregon, Washington, Utah and Idaho. Ganz is the former president of Regence BlueCross BlueShield of Oregon, the state's largest health care plan covering nearly one in three Oregonians.

HIS BIG IDEA: Regence foresees itself transforming from health care administrator, or "traffic cop," to navigator of data. Regence would supply consumers with information about health care so that it is incumbent on them to make their own health care decisions. "Too often doctors, employers or insurance companies make [patients'] decisions for them. Consumers just get swept along," says Ganz. He wants to see consumers evaluate their health care much as they would other big-ticket consumer products. This scrutiny would in turn induce market-price competition among providers and drive down the rise of health care costs. "If this nation is ever to gain control over escalating health care costs, the price of care must matter to consumers," says Ganz. "The thrust is to give people the sense that when they go to the doctor, it's their money and they need to choose carefully how they spend it."

HOW WOULD IT WORK: The first plan in Oregon oriented toward achieving Ganz's vision of consumer-directed health care is BlueChoices, which debuted last year. Ganz calls this a "baby step" toward his vision for all Regence care. BlueChoices separates the provider network from the benefit structure so employers design their own plans, determining which tradeoffs to make -- in terms of benefits, out of pocket expenses and access to particular providers -- to achieve their desired price point. A smaller network combined with a slimmer benefit package is less expensive than a larger network combined with a richer benefit package. Some plans replace the current premium structure with a "bank account" funded by employers for workers to draw on to cover part of their health care costs. Consumers cover the rest out-of-pocket. Ganz believes tying consumers' out-of-pocket costs to the cost of care they choose will spur them to become savvy shoppers for health care services. That, in turn, could dampen medical inflation. The consumer-driven approach, says Ganz, "would solve waste and moderate overall costs in the system and be far more responsive to consumer needs."

THE MAJOR PITFALLS: Building the information database on which a comprehensive consumer-driven system will depend requires massive infrastructure change. Also, consumers may simply turn away from care rather than undertaking the necessary research themselves. "Choice can work fine if people are enlightened and if they have the ability and information to do this," says Kathleen Weaver, director of Oregon's office for Health Policy and Research. Ken Rutledge, president of the Oregon Association of Hospitals and Health Systems, wonders if consumers will make the cost-effective choices. "When you or a loved one is sick, your rational thinking goes out the door," he says. "It's a normal reaction to say: ŒDo everything and anything to help me.'" Colin Cave, president of the Oregon Medical Association, warns that if copays and out-of-pocket costs are too high, people may not seek necessary preventive care.

WHO'S LIKELY TO OPPOSE: Dr. Kilo says his fellow medical practitioners may resist the plan because of the current lack of thorough comparative data. The public may also oppose plans such as BlueChoices because they will end up with an increased burden both in cost and responsibility to make decisions. "The number of unintended consequences of putting the finances on the individual hasn't been completely worked out yet," says Kilo.

WHAT'S NEXT: Regence will implement its vision in steps over the next decade. To make it work, Ganz wants all the players in health care -- insurers, employers, physicians, hospitals, consumers -- to follow suit so they can build the required information base. "One insurer can't redefine the health care system," he says.

Caring for the caregivers

WHO: Dr. Michelle Berlin, 45, is a gynecologist at the OHSU Center for Women's Health and heads up the clinic's activities as a federal Center of Excellence in Women's Health, one of just 19 in the U.S. With the designation (granted last year) comes more money for research, new opportunities for collaboration with prestigious academic medical centers nationwide, more clinical trials of new drugs and treatments and a higher priority for women's health issues in the state. "It puts Oregon on the map," says Berlin.

WHAT SHE's DONE: Berlin has a background in public health and preventive care, and came to Oregon from the University of Pennsylvania, where she helped develop a pioneering nationwide assessment of women's health -- Making the Grade on Women's Health (the upcoming 2004 edition is a joint project of OHSU and the National Women's Law Center). "OHSU is not like Harvard -- people aren't stuck in their fiefdoms, they really want to get answers. It's a nexus of intellectual firepower in research and collaboration that's unparalleled."

HER BIG IDEA: To figure out what diseases and behaviors are responsible for making women sick, then prevent them. Berlin says OHSU's national reputation for "evidence-based medicine" -- that is, for research that has a direct pragmatic impact -- is key to achieving that. "Do you know the most common reason women go to the doctor? ŒOther.'" she says, emphasizing that medicine doesn't provide women with a good descriptor for what ails them. "And what keeps women healthy? What do they die of? There just hasn't been good data on women's health." Now that Making the Grade has demonstrated just how bad most states are doing -- Oregon gets a failing grade in 15 of 27 categories measured, including prevalence of prenatal care, availability of abortion providers and access to health insurance -- Berlin wants to take the work to the next step. The National Center of Excellence's research and clinical practice will be oriented toward determining which tests and treatments are most effective at preventing the conditions women suffer and die from most, such as cardiovascular disease, diabetes, hypertension and breast and lung cancer. The focus will be to determine best practices for doctors nationwide on such questions as how frequently to perform mammograms and Pap smears, whether to attempt vaginal delivery after C-section, what pre- and post-natal care delivers the healthiest mothers and babies. "I want to achieve what's doable," she says.

HOW DOES IT WORK: Most of the research comes out of the clinical practice of the OHSU Women's Health Center. That venue itself is unique, incorporating not only a wide variety of specialists -- from internists to oncologists -- but also alternative practitioners such as massage therapists, homeopaths and acupuncturists.

"Women in particular view their lives as a continuum," Berlin says. "If you try to chop up women's lives into pieces -- young women, women of reproductive age, older ladies -- it doesn't work very well. Women feel a lot more comfortable coming to a particular place, seeing the same provider, year in and year out.

In many families, women are the gatekeepers -- they're the ones who get people to care, but they don't necessarily get care themselves. If they like the provider and the system, they're more likely to get care themselves." The National Center of Excellence coordinates activities in five areas: clinical care, leadership (helping junior faculty complete their research and get tenure), medical education, research and outreach to the community.

WHAT'S NEXT: More collaboration with political and community leaders, by bringing teams of experts together to work on public health issues. "The first thing we're looking at is cardiovascular disease in women and the rural-urban split," Berlin says. "Part of the goal is to provide information to legislators and policymakers. We can digest information so it's useful." Berlin's also committed to taking women's health information on the road -- everything from an ongoing series of brown bag lunches on the OHSU campus covering such topics as hormone replacement therapy, to lectures and information displays at Fred Meyer and Nordstrom. "It's not like we sit up on the Hill by ourselves," says Berlin. "Our people go all over."

Son of Oregon Health Plan

WHO: Dr. John Kitzhaber, 56, is a two-term governor of Oregon, former president of the Oregon Senate and a former ER doc in Roseburg. He works for three nonprofit groups: the Center for Evidence-Based Policy at OHSU, the Estes Park Institute in Colorado and the Foundation for Medical Excellence in Portland.

WHAT HE's DONE: First in the state Senate, then as governor, he authored and implemented the Oregon Health Plan, which covers 100,000 low-income people beyond what the federal Medicaid program provides.

HIS BIG IDEA: Kitzhaber wants to scrap Medicare and Medicaid, which he considers outdated, in favor of a multitiered system that provides health care for all the poor, including those who don't currently qualify. Medicaid covers specific categories of disabled people such as the blind and frail elderly, as well as the poorest of the poor (it's up to each state to determine just how destitute one must be to be eligible). But it leaves out many living below the federal poverty line. Though they are not low-enough income for Medicaid, they are too poor to elicit interest from insurance companies, so they don't get coverage. The former governor believes that by overhauling the federal aid structure, health care access would be more fairly distributed across all income levels.

"Those over 65 are now among the richest segments of society but they continue to be entitled to publicly subsidized health care paid for, in part, by working families who don't have access to health care for themselves and their kids," Kitzhaber says.

In place of the current system he wants to create a tiered structure that offers varying levels of care according to what people -- and society -- can afford. He says such a system exists already in practice -- care is rationed by one's ability to pay or by eligibility for public insurance -- but policymakers, politicians and health care providers won't acknowledge the fact. In fact, Medicare and Medicaid created an implicit system of tiers, he says, ranging from those who don't qualify for the federal programs to the rich who can buy anything. "People with more disposable income will always be able to purchase more health care than people who have less disposable income," he says. "All I'm saying is that we've got a lot of tiers and what we ought to do is establish them explicitly and base them on a policy that we're willing to defend."

HOW WOULD IT WORK: A "civic tier" would cover those unable to pay for their own care, and eligibility would be based on economic need. A "community tier" would include those insured by their employers, while a third tier would comprise those able to buy their own insurance, who would have greater choice of services and providers. Kitzhaber envisions a system that functions much like public education does today. "Everyone pays in -- rich people, poor people," he says, "and everyone gets some basic level of coverage." The system Kitzhaber proposes would reduce overall costs since everyone would be insured. There would no longer be an avalanche of uninsured people flowing into the emergency room for care, where treatment is most expensive, with costs ultimately passed on to employers and employees in the form of higher insurance premiums and out-of-pocket costs.

THE MAJOR PITFALLS: A tiered system is politically difficult to push forward, says Ken Rutledge of the Oregon Association of Hospitals and Health Systems, because it gives the rich a superior level of care. "In health care, people believe that just because you have money shouldn't mean you have a better chance of having your life saved." Health care consultant JD Kleinke says people have a philosophical block when it comes to limiting access to health care -- as would probably happen to those in the civic tier. "You can ration food with food stamps but you can't ration health care," he says. "Rationing medicine is like rationing life and hope, and it elicits a shrill response."

WHO'S LIKELY TO OPPOSE: Insurers fear they will be locked into a limited way of providing care, says Rutledge. Advocates for the poor would probably balk at the rationing of care. Businesses that don't currently offer insurance aren't going to like paying into a system to provide it universally.

WHAT'S NEXT: Kitzhaber wants to generate enough interest in these issues, especially among business, that Congress has to act. "No one wants to touch these things. But I think if we force the debate publicly, it'll force the system to address the real underlying problems of health care and access."

Dentists for free

WHO: The Salem chapter of Stand for Children, a national grassroots advocacy group based in Portland, has created the Salem Neighborhood Dentist Program. Key players include Kathy Bebe and Jessica Minahan of the Salem-Keizer school district and Catherine Pederson, a former nurse and the wife of a Salem oral surgeon.

WHAT THEY have DONE: Stand for Children is organizing for children's welfare in communities nationwide. Oregon's small enough for local chapters to make a difference, says executive director Jonah Edelman, because they can test out new ideas quickly.

THEIR BIG IDEA: Imagine this scenario: A child arrives at elementary school in such acute dental pain that he can't sit still or concentrate. He's sent to a mobile medical van, where he's diagnosed with a mouth infection so severe it would have spread to his brain within days.

Catherine Pederson heard this story at a church meeting where the problem of uninsured children was being discussed, and decided to do something. With other Stand for Children members, she began recruiting neighborhood dentists to volunteer to treat pediatric dental emergencies on-call, for free. The group first concentrated on the school where Bebe was principal -- where most kids are from low-income Latino families (99% get free school lunches) that either don't have health insurance or are on the Oregon Health Plan but can't find a dentist who will accept the OHP's low reimbursement rates.

Finding pro bono dentists wasn't easy. "Some of these kids have two little rows of blackened, broken-off teeth," Pederson says. "They need full surgical treatment, anesthesia, the works." Still, her perseverance paid off. There's now a volunteer dentist in each of 57 elementary and middle schools in the city. "We made philanthropic people out of dentists," she says.

HOW IT WORKS Each school has a parent or staff volunteer who coordinates free dental visits. But there are lots of strings attached. The kids can only bring one parent -- not their whole family; the treatment's only for emergencies, not cleanings or checkups; and no-shows are a strict no-no. "Dentists thought they'd be flooded with 20 kids a week," says Pederson. "They didn't want to be known as the only Mr. Nice Guy dentist. So we've put a limit on it. There are so many dentists participating, they know they won't be inundated."

THE MAJOR PITFALLS: Stand for Children readily admits the underlying need isn't for emergency care, but routine prevention. So the activists are urging local dentists to take on more OHP patients. And they've painstakingly cobbled together a few thousand dollars in grants to fund dental education in the schools, while also agitating to get soda machines expelled from the upper grades. "We've become dental vigilantes," quips Bebe.

WHO'S LIKELY TO OPPOSE: Pro bono efforts can divert attention from the bigger goal -- getting free or low-cost dental coverage to every kid in Oregon. "It's unfortunate that the Oregon Health Plan never got adequate funding, nor has it worked with the employer mandate as was originally intended," says Chuck Sheketoff of the Oregon Center for Public Policy in Silverton. "Then low-income working Oregonians would have dental care."

WHAT'S NEXT: Similar volunteer dentist programs are being explored in Beaverton, Silverton and Bend, and Stand for Children sees potential for a nationwide model.

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Copyright 2004 Oregon Business magazine