Oregon health insurers cut $24M in waste, OSPIRG finds

Sep 12, 2014 - Elizabeth Hayes, Staff Reporter- Portland Business Journal

This year’s more in-depth review process for health insurance rate resulted in lower rates on average for next year.

It also produced another benefit: cuts amounting to $24 million in waste and unjustified costs for consumers and small businesses, according to an analysis by Oregon State Public Interest Research Group.

Oregon’s rate review process has cut more than $179 million since 2010, OSPIRG found.

Oregon initiated a new effort to examine the drivers of health care costs this year, as part of rate review. The single biggest factor contributing to the savings were from a reduction in uncompensated care, an upshot of more people accessing public and private insurance, said Jesse O’Brien, OSPIRG’s health care advocate.

Almost all plans saw their projections related to uncompensated care cut by about two percentage points. The Insurance Division also instructed insurers to reduce their estimated growth in medical costs and to rein in their projections for the impact of pent-up demand from people who were previously uninsured.

O’Brien said the $24 million represents money that would have otherwise gone into the system and wouldn’t have been needed. More work needs to be done, however. Studies show that a third or more of all health care spending doesn’t go toward improving health.