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Oregon's disability: principles or politics?

Health care reform--to overcome problems of who gets care and how it gets paid for--has moved into the national spotlight during this election year. While Congress and the presidential candidates weigh dozens of proposals for partial or comprehensive change, the states have taken the lead in actually adopting new programs. On 3 August 1992, Louis M. Sullivan, M.D., Secretary of the U.S. Department of Health and Human Services, derailed one of the boldest reform measures when he denied Oregon's petition to be excused from certain requirements of the joint state-federal Medicaid program. Although this rejection was not wholly unexpected, the grounds on which Secretary Sullivan acted came as a surprise to many observers--while also giving a hint at a novel use for the new Americans with Disabilities Act of 1990, which came into effect on 26 January 1992.

Programs for universal access to care enacted this year by states such as Minnesota, Vermont, and Florida have received considerable notice, but perhaps the most attention has been directed at Oregon's plan, which was adopted three years ago but scheduled to go into effect in July 1992. The Oregon Basic Health Services Act of 1989 actually comprises three separate bills that together aim at extending access to health care to the 16 percent of the state's population that is uninsured.

Two of the statutes have generated relatively little national controversy. Senate Bill 534 establishes a high-risk insurance pool for people who are unable to purchase ordinary policies due to anticipated high need, typically those who have a "preexisting condition," in insurance jargon. The premium for these policies may not be more than 50 percent higher than the state average; state funds and mandatory contributions from private insurers will cover any shortfall from premimums. A second act, SB 935, will ultimately require all employers either to provide employees with health insurance or to make contributions to a state fund created for the purpose of issuing insurance. Together these two acts would provide health insurance to about two-thirds of the state's uninsured.

The centerpiece of the 1989 Oregon reform was Senate Bill 27, which extends access to care to most of the remaining 120,000 uninsured Oregonians by providing Medicaid coverage to all legal residents with incomes up to the federal poverty level. At present, Medicaid in most states covers only a subset of the poor, primarily those who qualify on "categorical grounds, such as being eligible for AFDC (Aid to Families with Dependent Children). In Oregon, AFDC recipients must generally have incomes below 50 percent of the poverty level to be eligible for Medicaid.

The controversial aspect of the Oregon plan is not it effort to create universal coverage but the means it uses to keep the costs of the program within bounds: the benefit package for all Medicaid recipients (as well as for people covered by the state health care insurance fund) would be determined by a list of 709 health condition-treatment pairs ranked by a newly created Health Services Commission. To make its ranking, the commission drew on information about how the public values various health care outcomes, as revealed through a telephone survey, public hearings, and meetings conducted by Oregon Health Decisions. Based on 17 major categories of outcomes (from treatments of acute conditions that prevent death and result in full recovery, to treatments that produce minimal or no improvement in patients' quality of well-being), the commission ranked condition-treatment pairs to reflect how the expected outcome of each contributed to achieving what the public values. This method was intended not merely to permit total spending to be controlled but also to define the benefit package in a more logical way, thereby providing not just "rationing" but rationality" as well.

Every two years, when the Oregon legislature meets, it will determine how much to spend on health care, thereby "drawing a line" on the list of conditions and treatments where the projected cost of providing the services above this line equalled the funds available. Although medically necessary diagnostic services are unaffected, the Oregon plan would not cover some treatments that are regarded as "medically effective"--that is, treatments that produce at least some change in the condition of some patients treated. Medicaid patients would not necessarily be denied such treatment however, because health maintenance organizations and other prepaid managed care programs in which they are enrolled would be free to provide treatment for conditions "below the line" if they could afford to do so; they would simply not be obligated to provide such treatments.

Because the coverage provided by the Oregon plan would differ from that mandated by federal law--in extending coverage to people not eligible under federal standards, in administering the program through different means, and in limiting the scope of services provided--Oregon petitioned the federal government on 16 August 1991 to waive fifteen Medicaid requirements so that it could conduct a five-year "demonstration project" to test the feasibility of its plan.

Criticisms Voiced

The Oregon plan has been subject to sharp criticism from advocates for the poor on two basic grounds. First, it is said that it broadens access to health care in the wrong way. These critics claim that if Oregon wanted to ensure that all poor people have health coverage it should spend more money (the state has one of the lowest Medicaid budgets per capita in the nation) and should control health care costs (by limiting what providers charge) rather than simply reallocate existing spending over a larger group of recipients. In a phrase, they say Oregon robs the poor to pay for the poor.

This objection is partially valid. Although some "new" funds were appropriated for health care, the expansion of the Medicaid rolls would rest in part on the plan's success in limiting the services offered to that subset of existing Medicaid recipients who are not aged or disabled.

Proponents of the plan respond in three ways. First, they argue that the enlargement of Medicaid recipients was largely made possible by the efficiencies achieved in shifting them into prepaid, capitated managed care programs, and they point out that the level of spending per client in the demonstration program would have been roughly equal to the amounts spent currently. Second, plan proponents note that in 1993 the SB 27 system will encompass Medicaid-eligible elderly, disabled, and foster-care patients, thereby greatly expanding the pool of funds available. Third, they claim that the services "below the line" that current Medicaid recipients have lost are of only marginal value and that this loss is more than compensated by the greater stability of eligibility for Medicaid and by the greater public acceptance of, and support for, a program that is seen as rational and grounded in a collective commitment to provide an adequate level of care for all.

The second set of criticisms are that as an "experiment," the Oregon plan fails on ethical and methodological grounds. Ethically speaking, critics contend that IRB review and informed consent from each potential subject are necessary. The central methodological complaint is that those evaluating the effects of the program will be unable to determine which specific components of the plan caused particular outcomes because preexisting data are insufficient, the implementation of the plan will vary from provider to provider, and other, concurrent changes in society and health care will interfere with the plan in ways that cannot be predicted or eliminated.

Under 45 CFR Part 46--the federal rules on research with human subjects--the Department of Health and Human Services may exempt social policy experiments from IRB review and need only require consent if the secretary concludes that the research project presents a threat to participants' "physical, mental, or emotional well-being."[1] As the Office of Technology Assessment concluded in its review of the Oregon plan several months before the secretary turned it down, "The Oregon proposal appears to fall within these exceptions, although some critics have claimed that language in the 1992 DHHS appropriations bill indicates otherwise."[2]

The methodological complaints about Oregon are probably valid but miss the main point. Rather than being true health services research, the Oregon demonstration program is really an experiment in public policy making, both in the means used to reach the result and in seeing whether it is possible to build a social consensus about what an "adequate level of care" really is.

The basic complaint about the Oregon plan--that it "rations" health services--is also its essential virtue in the eyes of its sponsors: not all health care interventions produce equally worthwhile results, and since we do not have enough money to pay for everything that medicine is capable of doing for every patient, it is better to give priority to treatments for particular conditions that produce outcomes that do the most to advance human well-being.

The ADA Curve Ball

While the "rationing" label scared some people in Washington, by February it appeared that, with the blessing of outgoing Health Care Financing Administrator Gail Wilensky, Secretary Sullivan would approve the Oregon waiver.[3] Although concerns about the effects of rationing on the disabled had been raised, they received only passing mention in the Office of Technology Assessment report, in large part because the disabled were not brought into the plan until 1993. Yet when a leader of the National Right to Life Committee got the ear of President Bush during a "photo opportunity" in April, the White House ordered a new legal analysis, resulting in the memorandum relied upon by Secretary Sullivan to deny Oregon's petition.[4]

The Americans with Disabilities Act primarily aims to ensure access for disabled persons to transportation, employment, and places of business. But it also states that no person "shall, by reason of such disability, be excluded, programs, or activities of a public entity," thus reaching even further than section 504 of the Rehabilitation Act of 1973, which was invoked in the 1983 Baby Doe rules.

The legal memo argues that the Oregon plan violates the ADA because the quality of well-being measurement it employed in quantifying the value of condition-treatment pairs discriminates against the disabled. The memo correctly notes that researchers have found that the average person (such as those who participated in the Oregon phone survey and who came to the public forums) takes a much more negative view of limitations on daily life imposed by illness or partially successful treatment than do people who actually live with such limitations. Yet this hardly proves that Oregon violates the ADA.

First, "OTA analyses of the list showed that the weights from the public survey had relatively little effect on the final rankings."[5] Indeed, a major criticism voiced about the process was that the commission had "hand adjusted" the rankings too much. The guidance to the commission provided by the community's values is a strength of the Oregon process. To remove such valuations (as commanded in the federal government's legal memorandum) and replace them with a "constant value of 0.5" would falsely suggest that anyone, disabled or otherwise, would regard all possible outcomes as equally beneficial. It would be surprising, indeed, to discover that in evaluating two treatments that were otherwise similar (in duration, pain and inconvenience, cost, etc.) persons with disabilities would not value more highly the treatment that could fully restore them to a disability-free state in preference to the one that would perpetuate their disability.

More important, the legal memo misrepresents the role that quality-of-life information plays in the Oregon scheme. Starting with a particular condition (such as appendicitis), the commission derived a measure of the net improvement in outcome that could be expected from a particular treatment (such as appendectomy) compared with nontreatment; the measurement of outcome included numerical values (derived from the public opinion sampling) for the various aspects of the potential outcome, from death to full recovery with no limitations in mobility, physical or social activity, and so forth. The memo cites an analysis by David Hadorn in these pages, but omits his conclusion: "It is the change in quality of life, or net benefit, realized from treatment that matters, not the point-in-time quality of life of a patients."[6]

Indeed, the administration's use of the ADA is ironic because one of the most telling criticisms of the Oregon plan has been that it undermined the rationality of its own priority rankings by failing to take into account the existence of the multiple problems patients may have--that is, the benefits from treatment A for condition X may be much less than expected if the patient also has condition Y. Oregon's answer had been that adequate data and sufficient modeling were not available to take all such comorbidity into account. Yet it is now apparent that had Oregon added this complexity to its scheme, it might with more justice have been critized for discriminating against the disabled.

The confusion--or, less charitably, the misrepresentation--about the relationship of Oregon's plan to the ADA can be seen by examining the two condition-treatment pairs that the memo singles out as needing to be resolved before the waiver can be approved. The first of these is liver transplanation for alcoholic cirrhosis of the liver, which is ranked at line 690, below the line-587 cut-off point under the funding currently approved by the Oregon legislature. Given that alcoholism is regarded as a disability under the ADA, the refusal to fund liver transplants for alcoholic cirrhosis arguably denies treatment "by reason of [a] disability" because transplants for cirrhosis from other causes are covered. To overcome this problem, Oregon need merely distinguish between patients whose alcoholism is under control (that is, those whose disease was linked to past disability) and those who are still drinking (that is, those for whom the expected net benefit from the transplant will be much lower).

The second condition-treatment pair cited by the memorandum is life support for extremely low birthweight babies under 23 weeks' gestation (ranked next-to-last at line 708). In the critics' view, this is unlawful discrimination because it reflects an undervaluation of the probable outcome in such cases (death or mental and physical disabilities). But the example actually proves too much, for the fault lies not with the discord between the way those states are ranked by persons with disabilities and their ranking by the "average person," but rather in the very fact of ranking-by-out-come itself. Implicit in such a process is the conclusion that certain outcomes--that is, certain qualities of being--are to be preferred over others.

It does not seem unreasonable to read the ADA as prohibiting an absolute rule against treating a particular group of patients (such as low-birth-weight premature babies) solely because their expected quality of life is viewed by others as unacceptable. But reading the ADA to prohibit the decision to use limited health care resources to treat other conditions before this particular group would erect a virtual roadblock to rationalizing health expenditure policies.

As some form of rationing is an inevitable part of all health insurance, the ADA roadblock to rational prioritization of services by their expected benefits should be of grave concern to us all, not just to Oregonians. The Supreme Court has already indicated that antidiscrimination statutes do not prevent the government from placing limits on Medicaid coverage even when doing so may have a disparate impact on handicapped persons, provided those who are "otherwise qualified" for a service are not denied "meaningful access" to it because of a disability.[7] Since Secretary Sullivan's ruling is based on a misunderstanding of the Oregon plan and a misreading of the ADA, one can only hope that once the pressures of the presidential election are behind us (whatever its outcome), the occupant of the White House and his Secretary of Health and Human Services can be persuaded to take another look at Oregon's application for a Medicaid waiver.


1. 45 CFR section 46.101 (i).

2. U.S. Congress, Office of Technology Assessment, Evaluation of the Oregon Medicaid Proposal (1992), p. 188.

3. M. E. Pinkerson, Oregon's Health Care Plan: The Story of an Experiment in Governance (Ph.D. diss., University of Southern California School of Religion, 1992), p. 277.

4. "The administration's arguments appear essentially identical to those put forth by the National Legal Center [for the Medically Dependent & Disabled, Inc.]" in a report prepared in December 1991 for Rep. Christopher Smith (R, NJ). David C. Hadorn, "The Problem of Discrimination in Health Care Priority Setting," JAMA 268, no. 11 (1992): 1454-59, at 1459.

5. OTA, Evaluation, at 186.

6. David C. Hadorn, "The Oregon Priority-Setting Exercise: Quality of Life and Public Policy," Hastings Center Report 21, no. 3, special supplement (1991): S11-S16, at S13.

7. Alexander v. Choate, 469 U.S. 287 (1985).
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Title Annotation:At Law; universal access to health care
Author:Capron, Alexander Morgan
Publication:The Hastings Center Report
Date:Nov 1, 1992
Previous Article:Genetics and the moral mission of health insurance.
Next Article:Oregon's denial: disabilities and quality of life.

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