Oregon Medical Group Southtowne Clinic in Eugene, Ore., which shuttered in 2024. The group is one of the three health care entities recently identified by 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 reign in health care spending for years. In 2019, lawmakers 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 that show 28 health care entities had costs over the target. For the first time, it found three of those did not provide valid justification for the increased costs.
Justifications can include providing new or expanded services like behavioral health, an increase in workforce costs or extended hospital stays because of a shortage of nursing facility beds.
“We know that people are delaying health care because of how much it costs, skipping prescriptions, or delaying doctors appointments because of that affordability concern,” said OHA program manager Sarah Bartelmann. “What this program is really focused on is helping health care costs grow a little bit more sustainably.”
Oregon Medical Group’s privately insured patients’ costs increased by nearly twice the target. OMG was purchased by Optum, the largest employer of physicians in the U.S., in 2020. Since then it’s lost more than 30 physicians and dropped potentially thousands of patients.
Optum also purchased Portland-based Family Medical Group Northeast in 2021, Canby, Oregon-based Davies Clinic in 2023 and The Corvallis Clinic last year, according to Oregon Health Authority documents.
Insurer UnitedHealthcare, which is owned by the same parent company as Optum, also had its spending flagged. OHA found UnitedHealthcare’s Medicare Advantage plan costs increased by 6.4% without a valid justification in 2021.
OHA also found Portland-based insurer Moda Health’s Medicare Advantage plan also had an unreasonable cost increase, about 11.6%. However, the company ended that plan in 2024.
Bartelmann said another report looking at 2022 health care spending will be released in May. After that, reports will be released annually.
If a health care entity fails to meet the cost targets after the May review, the agency can place it on a performance improvement plan in hopes of lowering costs. The agency can start issuing penalties next year for companies that continue to miss spending targets.
“We’re at this point where we are starting to hold health plans and provider organizations accountable for their cost growth,” Bartelmann said. “If they go over the cost growth targets, we need to have conversations with them about why”
Optum did not respond to a request for comment from KLCC.
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