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The Guinea Pig State

Oregon’s quarter-century of failed liberal health care experiments

Feb 24, 2014, Vol. 19, No. 23 • By MARK HEMINGWAY
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As a cultural matter, Oregon prides itself on embracing bold legislative experimentation. If states are the laboratories of democracy, then Oregon has been run by mad scientists for more than a century. In 1902, it was the second state (after South Dakota) to adopt a voter initiative process. This has resulted in a remarkable degree of direct democracy and generally cultivated among Oregonians an alarming willingness to inflict unproven ideas upon themselves. Oregon has tried to make a virtue of experimentation for experimentation’s sake. In that respect, the state motto is curious, but apt: Alis Volat Propriis, or “She Flies With Her Own Wings.” Yet even if you’re a fan of progressive governance, the state has a decidedly mixed record as a policy trailblazer. Oregonians proudly point to the fact they had the first “bottle bill” requiring a deposit on beverage containers, which environmentalists credit with kickstarting the recycling movement. But residents are far less likely to bring up, say, their pioneering and morally questionable assisted-suicide law as one of the state’s crowning achievements. 

The apotheosis of Oregon’s dubious obsession with policy experiments is the Oregon Health Plan. Nearly two decades before the word “Obamacare” crossed anyone’s lips, Oregon legislators were trying to realize their own progressive vision of universal health care by expanding Medicaid and mandating that employers provide health insurance. Though the program has defenders, it is difficult to credibly argue that the Oregon Health Plan has been anything other than a policy disaster. And unsurprisingly, it has a great many similarities to Obamacare. Even though the plans differ, the Oregon Health Plan suggests an alarming future for Obamacare’s cost control measures. Finally, the history and long-term political consequences of the Oregon Health Plan provide some instructive lessons for those looking at the fate of Obamacare. 

Rationing

In 1987, shortly after funding for major organ transplants was cut from the state’s Medicaid program, 7-year-old Oregonian Coby Howard was denied a bone marrow transplant. The operation would have given him a 50 percent chance of survival, and Howard died amid a national outcry over the denial of treatment. In response to Howard’s death, the Oregon legislature embarked on an ambitious attempt to fix the state health care system. The earliest incarnation of the Oregon Health Plan was proposed in 1989, though it went through several iterations before becoming law in 1993. 

The principal author of the plan was John Kitzhaber, then president of the state senate. Representing rural Southern Oregon, Kitzhaber, with his sartorial fondness for cowboy boots and Jerry Garcia ties, was a walking metaphor for bridging the state’s pronounced cultural divides. It helped that Kitzhaber was also an emergency room doctor whose inviting but no-nonsense demeanor made him appear more pragmatic than his liberal Democratic colleagues. Kitzhaber’s role in the creation of the Oregon Health Plan eventually propelled him into the governor’s mansion, and though he’s hardly a national name, he’s arguably done more to advance liberal health care reform than any other politician until Barack Obama. His popularity is such that Kitzhaber was elected to his third (nonconsecutive) term as governor in 2010 and is poised to win a fourth term this year. This in spite of the fact that his signature legislative achievement has been a slow-motion train wreck for more than two decades. 

Considering the catalyst for Oregon’s health care reform, Kitzhaber was an unusual choice to head the effort. In the state legislature, he had opposed funding transplants for Medicaid patients, arguing the money would be better spent on other health care priorities. And when given a chance to reform the state’s health care system, Kitzhaber doubled down on his belief that the amount of health care paid for by the state should be limited. 

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