Intended for healthcare professionals

Feature Rationing

Why Oregon went wrong

BMJ 2008; 337 doi: (Published 14 October 2008) Cite this as: BMJ 2008;337:a2044

This article has a correction. Please see:

  1. Vidhya Alakeson, policy adviser
  1. 1Department of Health and Human Services, Washington DC, USA
  1. alakeonvidhya{at}

    Oregon’s brave plan to explicitly ration health care in order to cover more people soon ran into problems. Vidhya Alakeson looks at the reasons and asks whether history will repeat itself

    Oregon attracted international attention after its decision to introduce a system to transparently ration treatments in its Medicaid programme, known as the Oregon Health Plan. But two decades on, the story that has emerged from the Oregon experiment is not the expected one of controversy linked to healthcare rationing. The real story centres on the limitations of this approach in controlling healthcare costs and sustaining state health reform, particularly in tough economic times. As the US electorate expects national health reform next year, the fate of the Oregon Health Plan is a timely warning.

    High ambitions

    The Oregon Health Plan was created in 1989 to expand coverage to some of the 400 000 citizens who at the time had no health insurance. Spearheaded by state senator turned governor John Kitzhaber, the plan was intended to extend coverage to people with incomes less than 100% of the federal poverty level ($12 100 (£7000; €9000) for a family of four). To free up money to cover additional people, Kitzhaber needed to find a way to spend less on existing Medicaid recipients.

    States tend to favour two approaches to control costs in Medicaid: they either pay providers less or reduce the number of people eligible. Oregon rejected both methods and instead opted for a new, bold approach: it would ration the benefits covered under Medicaid.

    Instead of cutting benefits haphazardly, the state decided to approach the task of rationing in a transparent and logical manner by introducing a prioritised list of treatments. The Oregon Health Services Commission was created to develop the list. By law, its 11 members must include five doctors, a public health nurse, …

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