Oregon Health Authority Calls Out Five Healthcare Organizations for Excessive Cost Increases

The Oregon Health Authority has named five healthcare organizations that claimed unreasonably high cost growth in 2023.

Healthcare Costs Pinned at 3.4% Yearly

OHA’s Sustainable Health Care Cost Growth Target Program, which measures what people and organizations in Oregon spend on healthcare, aims to limit healthcare cost growth to an average annual increase of 3.4% per person since 2021.

Yesterday, OHA announced that five organizations failed to meet acceptable cost growth standards in 2023 and did not have acceptable reasons for their increased spending.

OHA compared 120 insurance plans, hospital systems, and medical groups to determine their expenditure when serving people with commercial, Medicare Advantage, and Medicaid coverage.

Three Organizations Must Submit Healthcare Expenditure Plans

The comparisons led OHA to name three insurance plans, one hospital system, and one medical group as failing to meet the state’s acceptable spending target. The three organizations are now required to develop plans to meet the state’s healthcare spending target. They are:

• The St. Charles Health System commercial insurance increased by 26.3%.
• UHC Company’s Medicare Advantage insurance plans increased by 6.3%.
• PacificSource’s commercial insurance plans increased by 7.3%.

The other two entities – ModaHealth’s Medicare Advantage insurance plans, which increased 15.4% and The Corvallis Clinic, whose commercial insurance increased 8.7%, are being excused by the OHA. The organizations must submit performance improvement plans and identify the cause of high cost growth by the end of January 2026.

ModaHealth’s Medicare Advantage does not need to submit an improvement plan because it no longer offers insurance plans. OHA has also excused The Corvallis Clinic to that it can focus on holding its parent company, Optum, accountable in future measurement periods.

Healthcare is Becoming Unaffordable to Working Families

The OHA says healthcare costs are rising at an alarming rate and are becoming unaffordable for working families.

Reduced federal support for Medicaid and Affordable Care Act health plans is expected to cause people to lose healthcare coverage until they need more expensive emergency care.

From 2028, OHA will begin to issue fines to healthcare entities that fail to meet the target in three out of five years.

The Cost Growth Target Program may only penalize organizations that fail to meet the cost growth target – without an acceptable reason – three times in a five-year period.

Frontline healthcare worker compensation grew 3.3% in 2023, a slower rate than compensation for others who work at hospitals and medical groups. In comparison, the growth rate for non-frontline workers was 13%.

Frontline workers are those who do not hold managerial positions and who earn less than $200,000 a year.

The OHA is currently reviewing the target rate for 2026 through 2030, and a workgroup is expected to make a recommendation to OHA after its last meeting tomorrow (November 19).