The Oregon Health Authority (OHA) recently identified several healthcare providers and insurance plans with excessive cost increases in 2023. Notably, the Corvallis Clinic, St. Charles Health System in Bend, and three insurance plans—including PacificSource’s commercial plan and United Healthcare’s Medicare Advantage plans—were highlighted for their price hikes.
OHA defines an unreasonable increase as any growth exceeding 3.4% without valid reasons, like higher drug prices or government mandates. Some other providers met the state’s cost growth target, demonstrating that their increases were justified.
Clare Pierce-Wrobel, OHA’s Director of Health Policy and Analytics, mentioned that no penalties will be imposed this year. However, some providers will work with the agency to develop cost-reduction strategies. She pointed out the broader implications of rising healthcare costs, noting that they can squeeze family budgets and hinder overall economic growth.
In a notable development, the Corvallis Clinic was acquired by Optum, a national healthcare corporation, early this year. Sarah Bartelmann, who manages the OHA’s Healthcare Cost Growth Target Program, indicated that this ownership change means higher accountability for cost management. “We need to include Optum in our discussions since they now control the clinic’s operations,” she said.
UnitedHealthcare, flagged for high costs, is similarly owned by the same parent company as Optum. In a letter to the OHA, Phil Capp, Executive Medical Director for Optum Oregon Care Delivery, explained that many cost issues could result from factors beyond the clinic’s control. He expressed optimism that, as the Optum model is implemented, both costs and patient experiences will improve.
Interestingly, Moda is no longer offering the specific Medicaid Advantage plan that was flagged, so it won’t need to submit a performance improvement plan.
St. Charles Health System and PacificSource must now collaborate with OHA to explain their cost increases and propose steps to address them. For the Corvallis Clinic, OHA will hold off on immediate penalties to allow focus on Optum’s accountability going forward.
Starting in 2028, healthcare providers may face fines for ongoing unreasonable cost increases. According to recent studies, rising healthcare costs are a national concern, impacting not only budgets but also health outcomes. The experience in Oregon reflects a larger trend seen across states, where transparency in pricing is becoming a major focus for regulators and consumers alike. Rising costs are not just a local issue; they represent a challenge that many families face nationwide.
With healthcare a hot topic on social media, many users are demanding greater transparency and accountability from providers. As these conversations grow, it will be interesting to see if they lead to changes that make healthcare more affordable for everyone.
For more information on cost growth in healthcare, you can check out the OHA’s detailed reports here.
