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                                                                                HEALTH, Page 45

Oregon's Bitter Medicine


The scuttling of the state's model Medicaid plan raises doubts
about the chances of achieving any kind of health-care reform
in the U.S.

By PHILIP ELMER-DEWITT -- With reporting by Edwin M. Reingold/Los
Angeles and Dick Thompson/Washington


    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 non alcoholics, 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.