Oregon Medical Group Southtowne Clinic in Eugene, Oregon, which closed in 2024. The group is one of three health care entities recently identified by the Oregon Health Authority for their excessive cost growth targets without justification.
Rebecca Hansen-White / KLCC
The Oregon Health Authority has found that Eugene-based Oregon Medical Group, and two insurers, unreasonably increased health care costs.
Oregon has been trying to get health care spending under control for years. In 2019, legislators created the Sustainable Health Care Cost Growth Target Program to study and limit health care costs.
Under the program, health care companies operating in Oregon are only allowed to increase spending by 3.4% per person, a rate based on wage growth and inflation.
On Wednesday, OHA published findings showing that 28 health care facilities had costs above target. For the first time, it was found that three of these did not provide a valid justification for the higher costs.
Justifications may include the provision of new or expanded services such as behavioral health care, an increase in staffing costs, or longer hospital stays due to a shortage of beds in nursing facilities.
“We know that people are putting off health care because of the high cost, skipping prescriptions or putting off doctor appointments because of affordability,” said Sarah Bartelmann, OHA program manager. “What this program is really aimed at is helping healthcare costs grow a little more sustainably.”
Oregon Medical Group’s privately insured patient costs increased by nearly twice the target. OMG was purchased in 2020 by Optum, the largest employer of physicians in the US. It has been ever since more lost than 30 doctors and possibly thousands of patients.
Optum also bought Portland-based Family Medical Group Northeast in 2021, Canby, Oregon-based Davies Clinic in 2023 and The Corvallis Clinic last yearaccording to Oregon Health Authority documents.
Insurer UnitedHealthcare, owned by the same parent company as Optum, also saw its spending under fire. OHA found that UnitedHealthcare’s Medicare Advantage plan costs increased 6.4% in 2021 without valid justification.
OHA also found that Portland-based insurer Moda Health’s Medicare Advantage plan also saw an unreasonable cost increase, about 11.6%. However, the company ended that plan in 2024.
Bartelmann said another report on 2022 health care spending will be released in May. After that, reports will be published annually.
If a health care facility fails to meet cost targets after the May evaluation, the facility can place it on a performance improvement plan in hopes of reducing costs. The agency could start imposing fines next year on companies that continue to miss their spending targets.
“We have reached this point where we are going to hold health plans and healthcare providers accountable for their cost growth,” Bartelmann said. “If they exceed cost growth targets, we need to talk to them about why”
Optum did not respond to a request for comment from KLCC.
This story comes from the Northwest News Network, a partnership between public media organizations in Oregon and Washington.
This republished story is part of OPB’s broader efforts to ensure everyone in our region has access to quality journalism that informs, entertains and enriches their lives. For more information, visit opb.org/partnerships.
