Oregon's Coordinated Care Organizations Show Cost Savings for Medicaid Population

Oregon’s coordinated care organizations (CCOs), a new coordinated care and payment model authorized by the state’s legislature in 2012, have lowered ER visits and hospitalizations.

According to Governing Magazine, in 2013 the 15 regional medical organizations provided care for about 90 percent of Oregon’s Medicaid population. From this, the organizations saw a 17 percent decrease in costly ER visits and a 32 percent decrease in hospitalization rates for several chronic diseases.

It is important to note that at the same time the ER and hospitalization costs decreased, primary care spending increased by 11 percent and preventative services increased by 20 percent.

Oregon’s CCOs payment model is very different than the fee-for-service model. Each organization receives a fixed global budget for physical and mental care for each Medicaid enrollee. Some CCOs also provide dental care and all will be transitioned to provide dental care in the coming years. The CCOs also work to engage enrollees in their own health and health care.

 Oregon holds onto a portion of the CCOs payment until the end of the year. When the year is up each organization is rewarded or penalized based on if they met certain objectives throughout the year, like reducing hospital readmissions.

Governing Magazine reported that 11 of the 15 CCOs earned 100 percent of their withheld performance pay in 2013 and some earned even more through extra funding for objectives like “boosting primary care enrollment and controlling blood sugar levels in diabetes patients.”

Oregon’s CCOs are part of the national movement towards Accountable Care Organizations contained in the federal health care reform. Oregon has 27 percent of its total population enrolled in a CCO, which is the largest percentage of enrollees among all states.

Oregon projects a potential cost savings of more than $3 billion over the next five years from their CCOs; and according to the National Academy for State Health Policy, Oregon’s model is expected to reduce the overall growth in spending by 2 percent over the next two years.

To learn more about Oregon’s CCOs go to, https://cco.health.oregon.gov/Pages/Home.aspx

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