To Improve Health and Lower Costs, Oregon Gets Flexible

When it comes to keeping members healthy—not just treating them when they’re sick—the Oregon Health Authority knows it can pay to be flexible. Through its 1115 demonstration, Oregon’s Coordinated Care Organizations (CCOs) can pay for non-medical services that improve the health of their members while lowering costs. CCOs are local networks of Medicaid providers that are accountable for the health outcomes of the people they serve. Most members of Oregon’s Medicaid program– known as the Oregon Health Plan (OHP)–belong to one of the 16 CCOs currently serving OHP members, depending on where they live.
Oregon recognizes that the essential ingredients for health are often not found in a hospital or provider’s office. When there is a medical reason for a non-medical purchase, the state’s 1115 demonstration gives CCOs the latitude to pay for things that Medicaid would not typically pay for–many of which address the social determinants of health.
If an air conditioner helps keep a senior citizen with a congestive heart condition comfortable and out of the hospital during a summer heat wave, that purchase is money well spent for the CCO. Purchasing a vacuum cleaner to help control a person’s asthma, or repairing a hot water heater so a person with mental illness can bathe are also examples of flexible services in action. CCOs have also used flexible services to fund rental assistance, moving assistance, security deposits and other housing supports, as well as temporary post-operative housing for a patient who needed to recover from surgery in a clean environment.
Because CCOs are paid a set capitation rate for physical and mental health care, they have a financial interest in keeping their members healthy and helping them manage chronic conditions. The state expects the creative use of flexible services to result in better health and lower costs.
While the effects of flexible services are difficult to isolate, the state’s most recent health system transformation report shows decreased hospital admissions for asthma and chronic obstructive pulmonary disease among adults aged 40 and over, as well as decreased hospitalization rates for short-term diabetes complications among members with diabetes aged 18 and older. In addition, the rate of emergency department visits has declined among people served by Oregon CCOs.
To learn more about the Oregon CCO efforts to integrate health and housing through the use of flexible services, see the NASHP webinar, “State Strategies for Integrating Health Care and Housing for Homeless Individuals and Families.” Oregon’s CCOs will also be discussed at the NASHP population health pre-conference panel, “Innovative State Strategies to Integrate Public Health and Social Services with Delivery System Reform.” Is your state using innovative strategies to integrate public health, social services, and delivery reform? Share them on the State Refor(u)m population health discussion board!