Keep up with the latest news, advice and industry insights.

The Price of Mismanagement: Assessing the Impact of Measure 101 (Part 2)

the price of mismanagement measure 101 Oregon healthcare


Last week, I talked about Measure 101 and the disastrous mismanagement that led to its development.


Now I’m back for round two to discuss the specific effects this deceptively named “assessment” will have on the Oregon healthcare system.


Before diving in, however, here’s a quick recap: Voters approved Measure 101, which taxes hospitals and health insurance providers to pay for our state’s Medicaid expansion.


The tax on health insurance providers is basically an indirect transfer to all Oregonians, since these companies can turn around and increase health insurance premiums by up to 1.5 percent for consumers, including all the small businesses, K-12 school districts, nonprofits and thousands of college students who buy these health insurance plans.


These taxes will have other huge repercussions for consumers that include:


1. Healthcare services will cost more as hospitals compensate for the tax.

2. Oregon school districts will bear the heavy burden of $25 million in healthcare taxes.

3. Other businesses will be forced to raise prices because of their higher health insurance premiums.

4. Local governments will be impacted too, which will ripple out to our citizens.


But that is only a bird’s eye view of the Measure’s impact. Let’s dig deeper to assess the gravity of these taxes and what they mean for our healthcare system.


Devastating Oregon Healthcare


A tax of 0.7 percent on hospitals’ net revenue may not seem like a lot, but that on top of other severe tax changes and cuts for state reimbursement is putting a major strain on our local hospitals.


For one, Providence had to lay off 210 of its employees and gut its mental health hotline service because the hospital is struggling to keep up with its operational costs.


As Providence spokesperson Colleen Waddell wrote, “There has been a fundamental shift in our industry in that we are providing more care to more patients, but are receiving the same amount of revenue and often less to cover the costs.”


Let’s not forget that Providence is one of the biggest hospitals in the country. If they’re struggling with these taxes, the smaller facilities trying to stay afloat are getting capsized by the costs.


When the ACA passed in 2012, hospitals everywhere were flourishing because the number of uninsured and low income patients decreased, which meant less expensive ER visits and less charity care cases.


Now with rise of staggering taxes on hospitals, many Oregon facilities are facing hard times. As Andy Van Pelt, the executive vice president of the Oregon Association of Hospitals and Health Systems (OAHHS), noted:


Oregon hospitals saw a distinct downturn in financial performance in 2016 and into 2017. Across the board they are managing this challenge along with the political uncertainty at the federal and state levels to ensure they deliver the care Oregonians need.


What’s worse is that many hospitals were proud to help the state mitigate its $1.8 billion deficit for Medicaid expansion.


Then lawmakers began exploiting their partnerships with these hospitals, imposing tax after tax and straining local facilities. OAHHS president and CEO Andy Davidson said of these developments:


We’re really proud of playing a role in helping solve what was the largest Medicaid deficit the state has ever faced. When you add on the $190 million estimated impact from this very niche ‘cost control’ measure, we can’t do anything but be clear: It’s going to have an impact on services, on staffing and the shift of costs to other commercially insured patients. It’s really unfortunate we were constructive and proactive partners, and then we faced this very large guillotine.


The more hospitals struggle, the more they’ll have to charge for their services. With every new tax, access to affordable care for Oregonians becomes less of a possibility.


Had state lawmakers and the OHA not squandered hundreds of millions of taxpayer dollars, we wouldn’t be devastating the very systems that provide care.


Stay tuned for next week when I discuss the specific effects of Measure 101 on our school districts and the overall economy.