Oregon Outlines New Curbs On Its Medicaid Coverage

OREGON has embarked on a ground-breaking and controversial health-care program that is being closely watched by many states, by Congress, and by the US Department of Heath and Human Services. If it succeeds, proponents believe it will become a model for health care across the nation, which has seen skyrocketing costs while more than 30 million Americans remain uncovered by private health insurance.

The Oregon Basic Health Services Program sets priorities in the procedures available under Medicaid for the poor so that all those who need such care may get it. This differs from current practice in the United States under which any and all procedures are paid for under Medicaid; millions of potential recipients go uncared for because states can't afford it.

Rationing of health care?

Following 18 months of hearings and community meetings featuring both expert testimony and public input, a state commission recently released its ``prioritized list of health services,'' which defines and ranks such services based on costs, duration of expected benefits, expected improvement in the patient's quality of life, and community values. High on the list of 808 items are life-threatening conditions, maternity services, and preventive care for children. At the bottom are those procedures that me dical experts believe would prolong life, but are not expected to improve a person's quality of life.

Critics say this amounts to rationing health care for the poor while the relatively wealthy (or their insurers) can afford expensive procedures covering all medical contingencies, including those of questionable necessity.

Tina Castanares, a member of the commission and a physician at a clinic for the poor in Hood River, Ore., responds: ``I've been asked how I would feel if I had to tell a patient that a treatment which might benefit her won't be paid for because it falls low on the list. I reply I already have to do something very similar almost every day ... only it's the patient who is low on somebody's list of priorities for receiving help.... Prioritizing health care allows us to define a floor below whic h we should let no one fall.''

Michael Garland, a professor of medical ethics at Oregon Health Science University in Portland, calls the state's plan ``a yardstick, an aid for making decisions, not only about budgets and state tax dollars, but, more important, about the meaning of community and of justice and of fairness.''

Medicaid is a ``Great Society'' program begun in 1965, with federal and state governments sharing health-care costs for the poor. But Uncle Sam has put more and more requirements for medical procedures onto the states, which - unlike Washington - must balance their budgets. To meet federal mandates and receive matching funds without busting their budgets, many tax-strapped states have toughened eligibility requirements, thereby cutting needy people out of Medicaid.

Prioritized by benefits

Oregon Senate President John Kitzhaber notes that nationwide, ``the average eligibility standard is under 50 percent of the poverty level.'' Even a relatively wealthy state like California does not provide Medicaid to those with incomes more than 79 percent of the poverty level.

The Oregon plan ``differs markedly from the current pattern of random federal mandates and piecemeal state insurance mandates, which are often based on the relative power of special interests,'' says Senator Kitzhaber, who is also a medical doctor. ``Rather, we are prioritizing health services according to the degree of benefit each service can be expected to have on the health of the entire population.''

At present, Medicaid in Oregon covers 190,000 people. The new plan would raise that by 77,000, which means that even though some medical procedures would no longer be covered, the overall cost would still go up.

Oregon will seek a waiver from the Health Care Financing Administration (the federal agency that administers Medicaid) in order to provide public-funded health care to a wider population using the list of priority services.

Medical ethicist Michael Garland says Oregon's program is in line with recommendations of the President's Commission on Ethical Problems in Medicine and Biomedical and Behavioral Research. Professor Garland says that commission, which made its report to President Reagan in 1983, ``argued that a two-tiered system could still be equitable as long as the health care available to the lower tier measured up to a reasonable standard of adequate health care.''

A pattern for other states

At least nine other states have asked Oregon for more details about the plan, and two (Colorado and Michigan) have drafted similar legislation.

Some ethicists and members of Congress express concern that a plan like Oregon's could provide an easy way for states to ignore the full medical needs of the poor in order to save money.

``Whether we are right or our critics are right cannot be known unless the plan is tried,'' Kitzhaber writes in the current edition of Issues in Science and Technology, a National Academy of Sciences publication. ``If the plan succeeds, it can serve as a pattern for other states and, we hope, lead eventually to the kind of realistic and comprehensive federal action that the nation so sorely needs.''