Retracing the Oregon trail: the experience of rationing and the Oregon health plan

A decade ago the state of Oregon attracted worldwide interest when it began an ambitious attempt to set priorities for health care on a systematic basis. Stimulated by the death of a 7 year old boy who had been waiting for a bone marrow transplant operation, and led by John Kitzhaber, a doctor turned politician, Oregon passed legislation in 1989 designed to provide access to health insurance for all residents. A key part of the strategy was to increase eligibility for Medicaid, a publicly funded programme of health care for people with low incomes, by including in the programme all citizens with an income at or below 100% of the federally defined poverty level. To keep the costs of this policy within affordable limits, the legislature determined that the services provided should constitute a basic healthcare package, and it sought to ensure that Medicaid recipients were, whenever possible, enrolled in managed care plans. These plans, often known as health maintenance organisations, have developed rapidly as an alternative to fee for service medicine, and provide services to those enrolled on a prepaid basis. By managing the use of services by both patients and doctors, health maintenance organisations seek to reduce the overall cost of providing care while maintaining high standards of provision.