OHA Raises Concerns: Eugene Medical Group and Insurers Under Fire for Skyrocketing Spending

Oregon’s health system is facing challenges as costs continue to rise. The Oregon Health Authority (OHA) recently identified excessive cost increases linked to Oregon Medical Group and two insurers. This complicates the state’s long-term goal of controlling healthcare expenses.

Since 2019, lawmakers have been working to manage these costs. They created the Sustainable Health Care Cost Growth Target Program. This program limits how much healthcare companies can increase their spending. Currently, the allowed increase is 3.4% per person, based on factors like wage growth and inflation.

Recently, OHA released a report showing that 28 healthcare organizations exceeded this target. For the first time, three of these groups could not justify their price hikes. Valid justifications might include expanding services, workforce cost increases, or the need for prolonged hospital care due to nursing facility shortages.

“We know that people are delaying health care because of how much it costs,” said Sarah Bartelmann, a manager at OHA. She emphasized the program’s aim to promote more sustainable growth in health care costs.

Specifically, the Oregon Medical Group saw costs for their privately insured patients nearly double the growth target. Since being acquired by Optum in 2020, the group has lost over 30 doctors and many patients, raising significant concerns.

Optum has also expanded by purchasing additional clinics in Oregon. Among these are the Family Medical Group Northeast in 2021, Davies Clinic in 2023, and The Corvallis Clinic. Each transaction affects local healthcare access and pricing.

UnitedHealthcare, owned by the same parent company as Optum, was also flagged by OHA. Their Medicare Advantage plan costs rose by 6.4% in 2021 without valid justification. Meanwhile, Moda Health’s Medicare Advantage plan saw an increase of 11.6% before discontinuing the plan in 2024.

OHA plans to release more reports, with insights from 2022 spending expected in May. If companies fail to comply with cost targets, the agency can put them on a performance improvement plan. Starting next year, penalties may also be imposed for continued non-compliance.

“We need to hold health plans and providers accountable for their cost growth,” Bartelmann said. “If they exceed the targets, we must discuss the reasons why.”

As health care costs remain a pressing issue, Oregon is striving to ensure that quality care remains accessible to all residents.

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Eugene | Health Care | Health Insurance | Oregon Health Authority