Oregon's Bitter Medicine

By Philip Elmer-DeWitt

If anybody could find a way to solve the crisis of America's health-care system -- in which the insured get the world's most costly care and the uninsured get next to nothing -- it would be the good people of Oregon. Blessed with a long history of social-policy experimentation, they attacked the problem with almost heartbreaking earnestness. Beginning in 1983, they assembled doctors, businessmen and labor leaders for marathon discussions about how to distribute the state's limited resources. They built elaborate computer models to help rank medical procedures by cost effectiveness. They held 47 town meetings to thrash out the rules by which medical priorities would be set, and then followed up with a random telephone survey of 1,000 households to make sure citizens agreed with the resulting proposal. Finally, they submitted for Washington's approval an innovative plan that would have provided virtually every Oregonian with universal -- albeit somewhat restricted -- health-care coverage before the end of the year.

But it was not to be. In a move that caught most observers by surprise, the Bush Administration last week rejected the Oregon plan, sending it back for an overhaul guaranteed to delay the politically charged issue until after the presidential election. A legal opinion forwarded to the Governor by Health Secretary Louis Sullivan claimed the proposal was biased against the handicapped, violating the new Americans with Disabilities Act. The action not only undermined one state's initiative, it raised broader questions about whether the U.S. will ever muster the political courage required to replace today's patchwork medical-insurance systems with one that provides for all citizens.

The idea behind the Oregon plan was to extend medical coverage to the 450,000 state residents who, like some 36 million other Americans, have no insurance. The bulk of these people would have been protected by a new state rule requiring most businesses to insure permanent employees and dependents. But 120,000 are folks -- primarily women and children -- who live below the poverty line yet earn too much to qualify for Medicaid. Oregon wanted Medicaid to cover those people, and for that it needed Washington's O.K.

The state's dispute with the feds centers on the mechanism by which Oregon proposed to offset the added cost of its expanded coverage: its now famous rationing system. At the heart of the system is a list of 709 medical conditions ranked in order of seriousness and responsiveness to treatment, from bacterial pneumonia (1) to anencephaly (709). The legislature determined how much the state could afford and then drew a line at item 587 (inflammation of the esophagus). Conditions above the line would be covered for everybody; those below would get no coverage.

The Oregon plan drew criticism from a broad range of groups, from the Roman Catholic Church to the Children's Defense Fund. Even reform-minded Al Gore expressed concerns about the proposal, while Bill Clinton has not yet committed himself.

President Bush seemed to be leaning toward approval, despite the opposition of antiabortion groups who were disturbed that the plan did not provide anything but "comfort care" for premature infants with the least chance of survival. But the President was taken aback, according to several reports, when Robert Powell, a vice president of the National Right to Life Committee, voiced his opposition at a White House photo opportunity several months ago. "If that plan was in effect when I was born in Texas," Powell told the President, "I'd be dead today." As an infant, Powell developed an inoperable tumor that attacked his spinal cord and left him paralyzed from the waist down. Though the case seemed terminal, he was saved by an innovative doctor. Oregon Medicaid director Jean Thorne disputes Powell's charge. His condition would have been covered, she says, provided a physician could be found who considered it treatable.

Nonetheless, Secretary Sullivan's rejection letter last week reflected almost verbatim the National Right to Life Committee's critique of Oregon's plan, including a complaint that the state's phone survey was biased against disabled people. The Administration also maintained that by funding liver transplants only for nonalcoholics, the plan discriminated against alcoholics, who may be considered disabled. It further argued that to deny heroic treatment for the smallest preemies and for end-stage AIDS patients was discriminatory.

Taken to an extreme, the Administration's objections could undermine the very premise of Oregon's plan: if every sick or dying person comes under the protection of the Disabilities Act, rationing care becomes impossible. "There are a lot of disabled folks who don't qualify for Medicaid who would have received coverage under our plan," says Oregon's frustrated senate president, Dr. John Kitzhaber, father of the proposal. But almost nobody in Oregon -- or Washington -- thinks the fuss about the handicapped is anything but a smoke screen. Oregon's real mistake is that it tried to make tough choices about health care in an election year when timid politicians prefer to avoid the issue like the plague.

CHART: NOT AVAILABLE

CREDIT: NO CREDIT

CAPTION: DRAWING THE LINE

With reporting by Edwin M. Reingold/Los Angeles and Dick Thompson/Washington