Oregon outpacing national increases in health care costs, study shows

Oregon health care costs are growing faster than the national average — and are outpacing average wage increases in the state.

That’s according to the first annual report from the Oregon Health Authority’s Sustainable Health Care Cost Growth Target Program. The reports are aimed at analyzing the costs of health care in Oregon, and finding ways to keep those costs under control.

Director of OHA’s Health Policy and Analytics Division Jeremy Vandehey says out-of-pocket costs and rising insurance premiums are jeopardizing the financial stability of people in Oregon.

Oregon’s personal spending for health care rose by 34% from 2013 to 2019, outpacing national averages, the study found.

“What we see is a troubling trend that health care costs continue to grow faster than what we see nationally and continue to eat up a larger and larger share of families’ budgets,” Vandehey said.

The data from the survey stopped a year before the pandemic began.

“We know that there’s some significant workforce challenges in the health care system as a result of the pandemic, and nobody quite knows exactly how that’s going to impact the prices of health care services,” Vandehey said.

However, the study found that in 2019, nearly a quarter of the average Oregon family’s spending was going towards health care costs. The study included both employee and employer contributions when factoring insurance costs into the overall cost of health care.

The study found the effects of these increasing costs on families can be devastating, and in many cases, leads Oregonians to put off seeking care. “If people can’t access preventive care, if they can’t get the care they need to stay healthy and out of the hospital, that impacts the overall health,” Vandehey said.

People who delay care are more likely to see their health conditions worsen, and face higher costs in the long run.

“We also see really significant inequities in terms of who is impacted by health care costs and who’s delaying care,” Vandehey said.

For example, data from the 2019 Oregon Health Insurance Survey found that Oregonians who identify as Pacific Islanders were three times as likely as white Oregonians to delay care because of health care costs. Other marginalized communities were additionally more likely to report they were unable to pay medical bills.

Households have struggled to pay medical bills recently, incurring significant medical debt, including many who declared bankruptcy — according to studies the OHA report cited, including from the Peterson Center on Healthcare and OSPIRG.

The study also found 10% of people in Oregon reported using up all or most of their savings because of medical bills.

Health insurance and health care systems in the U.S. are complicated, according to Vandehey, and difficult to change.

“Part of it’s run by the federal government, part of it’s a combination of federal and state,” he said. “For large insurers, actually, states are prohibited from regulating parts of the market…. We can’t control or manage the whole thing, but there are a number of things that we can do as a state.”

One of those things is the Sustainable Health Care Cost Growth Target Program.

While the program’s recent report looks at a six-year period, future reports are intended to come out annually, with the intention of holding the big players in the health care system accountable for rising costs to patients.

“It’s sort of a goal and a target that we’re going to hold insurers and providers accountable to meeting year over year,” Vandehey said.

The goal is to limit annual increases in health care costs statewide to 3.4% over the next several years. That’s a percentage similar to the average increase in wages. State programs, like Medicaid, are already subject to a 3.4% growth target.

In comparison, health care costs rose around 6.5% a year during the period the study looked at.

Looking at the numbers, the average family’s insurance premium in Oregon was just under $20,000 in 2019, enough to buy a car. For individuals the number was around $6,600. While the program, created by state lawmakers in 2019, is still in its early stages, Vandehey said that future steps could include talking with lawmakers about ways to mitigate the fast-increasing health care costs in the state.

“It’s critical that people have access to health care that they need, and that it be affordable,” Vandehey said. “And that they not have to choose between housing and food, and health care”