By Lily Raff McCaulou • The Bulletin

A changing system

How reform efforts have changed Oregon’s Medicaid program so far:

The Oregon Health Plan, this state’s version of Medicaid, was launched two decades ago. But it expanded dramatically this year, after the federal Affordable Care Act — aka Obamacare — expanded Medicaid, if states so chose. Oregon did.


How many Oregonians were added to the Oregon Health Plan since the Jan. 1, 2014, Obamacare expansion. That’s more than twice the number that was expected.


How many Oregonians are on the Oregon Health Plan now.


An estimate of how much of Oregon’s total population is covered under the Oregon Health Plan.


The share of Oregon physicians who see patients enrolled in the Oregon Health Plan. Still, with so many new OHP patients, doctors are struggling to keep up.

Joel “Charley” Jones has become a poster boy for Oregon’s new health care reform effort. His story is an example of Oregon’s attempt to revolutionize Medicaid and, eventually, all of health care.

Under the old system, Jones likely would have been an amputee. Doctors told him his foot was so infected they would have to cut off his lower leg. He said he gripped the hospital bed as he tried to picture his life without one of his limbs.

Instead, Jones was given a clean environment to recover, money to take cabs to his doctors’ appointments and sturdy hiking boots to help support his fragile ankle.

The lifelong health costs associated with being an amputee can be upward of half a million dollars. Phill Greenhill, CEO of Western Oregon Advanced Health, said, “for a couple of thousands of dollars of common sense,” Jones’ leg was saved. Greenhill shared a condensed, anonymous version of Jones’ story at a recent conference, as proof that the new health care system delivers better health at lower costs.

But the truth isn’t so simple. Jones walks with a cane and still can’t sleep through the night without being roused by pain. Sometimes he wonders if he wouldn’t have been better off with a prosthetic limb.

If Jones’ story illustrates how far Oregon’s health care system has evolved in a few short years, it also demonstrates how much improvement is still needed.

In 2012, the federal government gave Oregon $2 billion to fill a short-term budget gap in return for the state’s long-term promise to reform Medicaid by achieving what’s being called the triple aim: better health care, better health and lower costs. Oregon’s reform strategy, which went into effect gradually throughout 2013, hinges on 16 coordinated care organizations, or CCOs. These are regional entities that have unprecedented flexibility in terms of how they spend Medicaid dollars.

The state expects to reduce the projected cost of health care by $11 billion over 10 years by focusing on preventive care, reducing waste and coordinating a traditionally fragmented health care system better.

While making his pitch for coordinated care organizations, Gov. John Kitzhaber repeatedly touted the anecdote of an elderly woman with congestive heart failure who lives in an apartment without air conditioning. A heat wave strikes, sending her to the hospital. The state foots tens of thousands of dollars in medical bills, covering everything from the ambulance ride to the team of doctors who treated her. But a $200 air conditioner used to keep her home cool and prevent her from being hospitalized? Not covered.

In theory, the new system is simple: Give CCOs the flexibility to pay for the air conditioner. In reality, the window unit comes with a complicated set of rules attached. And it might not keep her out of the hospital.

Billions of dollars are being invested in these new standards and rules, though their effectiveness is still an open question.

Meanwhile, the health of more than 971,000 Oregon Health Plan recipients — nearly 25 percent of the state population — is on the line. Half of all births in Oregon are covered by the Oregon Health Plan. And 85 percent of physicians in the state have patients who are enrolled in the Oregon Health Plan.

And if Kitzhaber gets his way, the new model for Medicaid could someday become the new model for all health care in Oregon. Earlier this year, the state Public Employees’ Benefits Board, which insures more than 130,000 public employees and their families, switched its insurance plans to more closely mirror the CCOs.

Regardless of how you get your health insurance — whether through Medicare or a private insurance company such as Blue Cross Blue Shield — the story of Medicaid in Oregon could be a glimpse into your own future. If the CCO model succeeds in saving money, private insurance companies will likely begin to adopt versions of the system, too. But does the new system really deliver better care?

Charley Jones Jr. stands outside the trailer he lives in with his girlfriend at Robbin’s Nest RV Park in Bandon on Jan. 23. Jones shattered his heel bone after jumping over a fence in October 2012 and almost had his foot amputated after it became infected with gangrene. Jones now needs a cane to walk, but his foot was salvaged because of the care he received from doctors in Coos County’s Coordinated Care Organization.

Photo by Alysha Beck / For The Bulletin

An excruciating ‘crunch’

Jones, 45, lives in a trailer park in Bandon. He grew up in this southern corner of Oregon’s coast, logging and gold mining. He can’t remember the last time a permanent roof was over his head.

One Friday in September 2012, Jones was house-sitting for a friend, doing yard work. He saw his girlfriend watching him through the window and thought he would give her a show. He grabbed the chain-link fence and thrust his body over it, envisioning the perfect “ta-da” he would do once he landed.

“Well, I’m not 16 no more,” Jones said.

His green eyes welled remembering the crunch he heard when he hit the ground. At first, he thought it was a sprain. The next day, his right foot swollen and throbbing, he knew he had to go to the hospital.

Jones had shattered his heel. He underwent surgery, which left him with a metal plate and nine screws holding his foot together.

Jones tried recuperating from the surgery at his stepfather’s home. Kitty litter was scattered across the floor. People high on drugs surrounded him. He crawled to get to the shower and by the time he reached the bathroom, the palms of his hands were nearly black, covered with filth.

He moved into a homeless shelter. But the shelter prohibited him from staying on the premises all day, despite doctors’ instructions to keep weight off his foot.

His surgical wound became infected. Dr. Ryan Pederson, the podiatrist who performed Jones’ surgery, told Jones he would likely need to have his lower leg amputated. Jones was devastated by the news and called an Oregon Health Plan help line. Eventually, he was connected to Yvette Grabow, a nurse case manager with Western Oregon Advanced Health, the CCO that covers Bandon.

Grabow took him to get a second opinion from an orthopaedic surgeon, Dr. Alan Whitney, who confirmed the first physician’s prognosis. To even have a chance of saving the foot, Whitney said, Jones would need at least six weeks of strict bed rest — an impossibility, given his surroundings. Even then, additional surgeries would likely be required. The doctors were skeptical that amputation could be avoided.

“It wasn’t healing and it wasn’t making any improvements,” Pederson said.

Charley Jones Jr. points to his scar from the metal plate doctors inserted after he shattered his heel bone by jumping over a fence and landing on it in October 2012. The wound became infected with gangrene and Jones' foot was almost amputated.

Photo by Alysha Beck / For The Bulletin

‘Things being taken away’

Under the old version of Medicaid, health care decision-making was relatively simple: A patient went to a hospital or found a doctor that accepted Oregon Health Plan patients. If the recommended treatment was covered by the Oregon Health Plan, it was administered and a bill was submitted to Salem. This system meant that health care providers often had little contact with one another.

When the state announced its plans to reform the Oregon Health Plan, it accepted proposals from groups interested in becoming certified as coordinated care organizations. Each proposal was different, and there were no stipulations about how many CCOs could be certified in each area. So the greater Portland metropolitan area, for example, ended up with three. Central Oregon got one, PacificSource Community Solutions.

Each CCO is governed by a board of representatives from all corners of the medical community: doctors, Oregon Health Plan patients and dentists, to name a few. Just getting different people in a room each month, to talk about the community’s health, is a new step for some.

Bruce Goldberg was director of the Oregon Health Authority, which oversees the state Medicaid program, until this spring, when he resigned in disgrace over Cover Oregon, the state’s beleaguered health insurance exchange. In an interview before he resigned, Goldberg said people are always nervous about something new, especially because “the history of health care is about things being taken away.”

But, he added, the old health care system isn’t perfect.

A 2013 study by the National Institutes of Health of 17 high-income countries found that the U.S. ranked at or near the bottom in infant mortality, heart and lung disease, sexually transmitted infections and life expectancy, despite spending the most money per capita on health care.

For several parts of the state, the newly certified CCO represented the first time that health care officials within a community had met each other in person, according to Goldberg.

One strength of the new system, he said, is that it encourages collaboration at all levels, from once-competitive health care executives convening around the CCO board table to primary care providers’ team approach to patient health.

Dr. Dan Murphy works at the St. Charles Family Care Clinic in Redmond. For 15 years, his clinic was known as Cascade Medical Clinic. Three years ago, his practice approached St. Charles about some kind of merger. He had recently visited a couple of clinics employing what he called the “medical home” model of medicine.

The Medicaid experiment was being designed at the time and also evoked this new model of care.

Sometimes called patient-centered primary care, the approach attempts to coordinate care for better outcomes while also saving money. Under the new Oregon Health Plan, members are asked to enroll in a primary care practice such as Murphy’s. The practice then receives a lump payment per member per month and is responsible for most care.

“It seemed to me to be something that was both desirable and part of the future of primary care medicine,” Murphy said.

Coordinating care

The most appealing part to Murphy was the team approach. Nurse care coordinators, medical assistants, doctors, community health workers and behavioral health specialists worked together with each patient to not only treat illness but promote wellness.

He and his business partners couldn’t fathom how to make it pencil out but they understood the value of, say, a nurse care coordinator who could regularly check in with patients in congestive heart failure.

Sometimes a patient with congestive heart failure can be kept out of the hospital by doing daily weigh-ins, Murphy said. A sudden fluctuation of 2 or 3 pounds is an indication that the condition is worsening and needs treatment before hospitalization is necessary. Murphy himself didn’t have time to check in with a patient daily, especially if the phone call replaced an office visit. Insurance companies will reimburse a doctor for an office visit but not a telephone call.

Instead, the practice was sold to St. Charles. Today, Murphy works with a nurse care coordinator who checks in with the congestive heart failure patients he described. The nurse’s salary is partly covered by the lump sum that St. Charles receives, per Oregon Health Plan patient per month.

To further illustrate the new system, Murphy described a patient he recently met for the first time. A woman in her mid-50s complained of shortness of breath.

“It turned out that her mother had died a few weeks ago. She had lost her job. She’d had breast cancer diagnosed a year and a half ago,” Murphy said.

The woman was having an anxiety attack.

“We did not use to screen for anxiety and depression. … Now we have two Ph.D. psychologists in our clinic,” he said.

When Murphy ruled out any physical problems, he walked the patient down the hall to a behavioral health specialist.

“Within 20 minutes, she was sitting down with a clinical psychologist who was teaching her relaxation exercises, helping her clarify a plan of what she wanted to do. When she left, she had follow-up visits set up,” he said.

“To me, that seems very, very different than what the ordinary person would see, no matter how good their doctor was, in the past,” he added.

Murphy’s clinic offers the same care for patients who aren’t enrolled in the Oregon Health Plan. But private insurance relies on a fee-for-service payment that won’t reimburse for services such as follow-up phone calls from a nurse, he said. In other words, much of the clinic’s billing system hasn’t changed to reflect this new model of care.

“That’s the most uncomfortable part,” he said.

Reverse integration

Mosaic Medical, a low-income clinic with locations in Bend, Redmond, Prineville and Madras, is doing what’s called reverse integration. In addition to embedding behavioral health specialists in its primary care clinics, Mosaic sends a primary care physician, Dr. Tina Busby, to the Deschutes County Behavioral Health Department one day a week.

“When someone is diagnosed with mental illness, they forget about their physical health being part of that whole piece,” Busby said.

In Deschutes County, adults who are diagnosed with a severe and persistent mental illness have a life expectancy of 48 years — that’s 25 years younger than the rest of the population, Busby said.

“They’re dying from things that we see frequently: diabetes, heart disease, stroke, cancer,” she said.

But some patients with mental illness struggle to go to primary care. Some have had negative experiences in medical settings, and others simply prefer being introduced to a physician by a therapist they already know and trust.

Busby said she has learned a lot from being around “the mental health world.” There, she said, the idea of coordinated care — sending community health workers to a patient’s home, or walking a patient into a behavioral health specialist’s office for what’s called a “warm handoff” — is the norm.

“They really focus on what the patient’s barrier to care is,” Busby said.

It’s a model for the kind of work that Mosaic Medical performs at its own clinics, she added.

The new system isn’t flexible for everyone, however.

Dr. Robert Ross, St. Charles’ medical director of community health strategy, said remnants of the old Oregon Health Plan sometimes constrict the new one.

Oregon first experimented with Medicaid back in 1993, when the state got a waiver from the federal government to launch its own version of the program, the Oregon Health Plan. Private insurance was too expensive for many working families, but Medicaid covered only the most destitute. Kitzhaber, a state senator at the time, proposed the Oregon Health Plan as a way to extend coverage to some of the hundreds of thousands of Oregonians without insurance. The idea was to expand Medicaid enrollment but keep costs in check by rationing coverage.

Every couple of years, a state committee ranks procedures and treatments based on data such as health benefit and cost. The Oregon Health Plan covers several hundred of the highest-ranked procedures. An illness like pneumonia, which has a high cure rate and is relatively inexpensive to treat, is ranked near the top of the list. At the bottom lie cosmetic procedures, as well as aggressive treatments for fatal illnesses — except for palliative care, which is covered. Doctors sometimes refer to procedures not covered by the plan — those ranked too low to qualify for coverage — as “below the line.”

In Central Oregon, primary care and hospital services are now covered on a per-member, per-month basis, but specialist services are not. Those procedures are still subject to the old rules that determined what is and isn’t covered by the Oregon Health Plan.

So the “line” still matters. Circumcision isn’t covered under the program. Allergy shots aren’t covered. Treatment for certain types of back pain isn’t covered. A person who is on the Oregon Health Plan and has missed five weeks of work due to a hernia is out of luck — hernia repair is not a specialty service covered by the Oregon Health Plan.

“That’s a bit of a problem with ‘the line,’” Ross said. “I understand it as a concept … but you have to make exceptions. And in a well-designed system, you can.”

More than 357,500 Oregonians have been added to the rolls of the Oregon Health Plan since Jan. 1, when the federal Affordable Care Act called for an expansion to Medicaid. That’s more than twice what the state anticipated, and it means that primary care doctors who accept new Oregon Health Plan patients have been slammed with appointments from people who were previously uninsured or couldn’t afford their copays. In much of the state, including Central Oregon, emergency room visits have actually gone up since the first of the year.

Matching needs to services

It’s not unusual for Grabow’s day to start with an early-morning text from a patient, she said.

On a recent morning, her phone began blinking at 6:36 a.m. A woman was trying to get to her drug and alcohol treatment programs but was out of bus tickets.

Grabow, a 53-year-old certified oncology nurse, now works as a care manager with Western Oregon Advanced Health, juggling up to 35 patients with complex needs each week.

Her strategy, she said, is to build relationships. She knows the doctors her clients see, she talks to their pharmacists. She negotiates with local homeless shelters and transportation providers. She has memorized the qualification requirements for a federally covered cellphone.

Grabow said she realizes that if the state’s health care transformation is going to have a shot at success, in many ways, it hinges on people like her and the relationships she builds with others.

Last spring, she sat in the exam room of the orthopaedic surgeon and heard him predict that Jones would eventually have his leg amputated below the knee.

Less than one year earlier, the organization that she worked for had switched from a managed care organization — also called an HMO — to a coordinated care organization. By the time she met Jones, Grabow was no longer limited to a set of numerical codes for insurance-approved procedures or drugs.

To have a chance of keeping his foot, Jones needed to take better care of himself and his infected surgical wound. So Grabow proposed a two-week trial run. In 14 days, if the wound had improved, the doctor would consider the alternative surgery that could help Jones keep his foot.

Jones and the doctor agreed to give it a try.

Grabow brokered an agreement with a nearby homeless shelter, to make an exception to the usual rules and allow Jones to not only sleep there at night but convalesce there during the day, too. The CCO paid the costs of housing Jones, and the shelter provided him with healthy meals and hot showers.

Jones was prescribed nicotine patches, to stop smoking. Smoking constricted his circulation, doctors said, and he needed as much blood flow as possible to help the wound heal. Three times a week, Jones went to a local clinic for professional wound care.

After two weeks, it had started to heal.

“I remember seeing Dr. (Ryan) Pederson and he said, ‘Oh my goodness.’ He was amazed and he was smiling and he said, ‘Can we have this (care) for everybody?’” Grabow said.

Jones, Grabow and the doctors agreed that the initial results were promising enough to continue trying to save the foot. Jones underwent a skin graft, in which a small piece of his healthy skin was moved onto the open wound, to help it heal faster. He continued regular wound care for four more weeks before moving out of the shelter.


To gauge its success or failure, the state devised a list of 33 criteria — sometimes called “metrics” — that, together, amount to a standardized test of the new health care system. Some measurements are gleaned from patient satisfaction surveys, others from medical data — the percentage of Oregon Health Plan adolescents who go in for annual well-care visits, for example, or the rate of pregnant women who receive timely prenatal care. The federal government, which funds Medicaid, has signed off on this testing system. But with any scoring system comes controversy.

In Bandon, Grabow keeps track of miscellaneous expenses — things that don’t have simple insurance billing codes — on a computer spreadsheet. Jones’ transportation and housing costs, for example, were covered using the CCO’s general budget, made up of its per-member, per-month payments. Most of Jones’ other expenses — wound care appointments, nicotine patches, a skin graft — were submitted as traditional claims.

When both categories of expenses are tallied and compared with the estimated $509,000 lifetime cost of amputating a limb — including surgeries, prosthetics and physical therapy — Grabow’s intervention appears to have saved the state about half a million dollars.

Late last year, Jones’ Medicaid expenses dropped even further — to zero. He lost his Oregon Health Plan coverage, and not because a new, high-paying job rendered the coverage obsolete. With no permanent address, he said, it’s impossible to stay on top of necessary paperwork.

When Grabow was contacted for this article and informed that Jones was no longer on the Oregon Health Plan, she helped him get reinstated.

Registered nurse Dawn MacDonald finishes bandaging the foot of Charley Jones Jr. during a checkup at Bay Area Hospital's wound clinic in Coos Bay on May 31. Jones shattered his heel bone after jumping over a fence and landing on it in October 2012.

Photo by Alysha Beck / For The Bulletin

The injury is still painful, he said. At its worst, it wakes him up in the night and makes him vomit during the day. He limps when he walks and leans heavily on a cane. On bad days, he wonders if he wouldn’t have been better off without his lower leg.

When contacted one day this spring, for a follow-up question related to this article, he said he was in so much pain that he was thinking about going to the emergency room.

Grabow, he said, gave him more personal attention than any health care worker he’d encountered before. She cared. She even gave him a pair of sturdy hiking boots that her co-worker’s husband no longer wore, to help keep his ankle stabilized.

Janet Meyer, CEO of the largest CCO in the state, Portland-based Health Share of Oregon, said Medicaid is a “poverty-fighting program.” And the new CCO model does seem especially well-suited to help the Oregon Health Plan population.

Unstable housing, poor nutrition and a lack of transportation can all take a toll on a patient’s health, so it’s helpful when health care providers have tools to address these other aspects of a patient’s life.

But the system clearly has limits, too. It certainly hasn’t helped Jones climb out of poverty.

Jones’ medical case — a shattered heel — is rare enough to go unmeasured by nearly all of the 33 metrics that supposedly quantify the system’s success. Intervention by Grabow saved the state thousands of dollars by avoiding amputation. But Jones is no healthier than he was before his injury, despite spending six weeks under closely scrutinized care. He is back to smoking.

Jones said he feels responsible, both for the initial injury and for not keeping the wound clean. But he is also frustrated.

He can’t ride his bike. To walk, he leans on a cane that his brother-in-law carved from wood found on the beach. Each of the 75 steps from his trailer to the trailer park’s showers hurts.

Jones is out of work. He has applied to wash cars at the local Toyota dealer, and to the local Subway. He tried mopping floors for a while. Without his girlfriend and the kindness of others, he said, he would be on the street.

“I want to work,” he said.

Sometimes he wonders if he wouldn’t be better off with a prosthetic limb. But he has heard that the pain wouldn’t stop even if the limb was gone.

He’s scared about his future.

“Am I going to gimp around the way I am,” he said, “the rest of my life?”