Budget Rebalance Largely Spares Oregon Health Authority

By Amanda Waldroupe, for The Lund Report, March 8, 2012

Services are largely preserved, but four wards at the new Oregon State Hospital won’t open until at least 2013

The Oregon State Hospital in Salem (photo courtesy Oregon State Hospital)

The Oregon State Hospital in Salem (photo courtesy of Oregon State Hospital)

The state’s rebalanced budget, one of the last bills the Legislature passed before adjourning Monday evening, largely spares the Oregon Health Authority from deep cuts.

Out of an $11.9 billion budget passed by the Legislature last year, $26 million general fund dollars were cut. But $15.4 million in other funds were added to the budget, meaning there was less than a $10 million cut.

There are two major themes characterizing the budget developed by the three co-chairs of the budget writing Ways and Means committee. The first was instructing state agencies to eliminate middle management positions in an effort to streamline state agencies and save money. The Oregon Health Authority is expected to save a little over $5 million by eliminating such positions (the number of which is still unclear at this point).

The second was tapping into the state’s rainy day fund and other available reserves to lessen program cuts.

One way this creative money shifting was used in the Oregon Health Authority’s budget was to direct $16.8 million of the tax revenue collected from insurance companies and use it for children’s healthcare programs, including the Oregon Health Plan Plus programs and the Family Health Insurance Assistance Program.

The budget also uses $5.7 million from a housing trust fund within the state’s community mental health programs to continue funding community services to children and adults with mental illness at the same level. Community mental health and addictions services thus escaped the chopping block.

And no cuts were made to any services associated with the Oregon Health Plan, including dental, mental health, addiction, or prescription drug benefits. The Oregon Health Plan’s delivery system is undergoing a massive overhaul as the result of the passage of House Bill 3650 and Senate Bill 1580, which create Coordinated Care Organizations (CCOs) that will integrate physical, mental and dental care for the 600,000 people on the Oregon Health Plan.

The federal government has practically promised it will give Oregon $2.5 billion dollars over the next five years to help fund CCOs; any cuts or changes to the Oregon Health Plan may have jeopardized those funds, or CCO implementation.

The Oregon Health Plan’s prioritized list of services, which provide coverage to 600,000 people also was not cut, and includes services for extremely vulnerable patients such as incontinence and cochlear implants for children.

Last session, 13 of the 39 prioritized services were cut, which sparked controversy and concern from organizations and advocates who argued that extremely ill, unhealthy and vulnerable patients were unfairly impacted.

Perhaps the biggest cut was postponing the opening of four new wards at the Oregon State Hospital. Those wards were expected to open this year but instead will open sometime in 2013. The postponement will save the state $19.6 million in general fund dollars. The Blue Mountain Recovery Center, a psychiatric hospital located in Pendleton, will remain open (an earlier budget proposal suggested closing the facility entirely).

Spokespeople from the Oregon Health Authority did not return a call for comment regarding the agency’s rebalanced budget, and the budget’s effect on services and programs.


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