Oregon Health Authority Enforces Improvement Plans to Cut Health Spending

For the first time, the Oregon Health Authority (OHA) is requiring three health organizations to submit a performance improvement plan to ensure compliance with the state's health care spending targets.

OHA’s 2025 cost growth target accountability report found that five health organizations did not have a justifiable reason to exceed the spending limits required by the state. The agency, therefore, is asking for plans to help reduce health costs for the first time, according to a press release.

“One of the key components of our strategic plan is ensuring access to affordable care,” Sarah Bartelmann, the OHA’s Cost Growth Target Program manager, told Newsweek in an interview. “So access is one component of that and affordable is the other part. It’s not enough to just be able to get in the door to see a provider if you can’t pay for it, or if you have to choose between paying for your health care and paying for your food.”

Why It Matters

Affordability is a major issue across the country, particularly with rising health care costs. A recent Gallup poll found that nearly half of U.S. adults are worried they won’t be able to afford the health care they need in the next year.

The OHA said health care costs across the country, including in Oregon, are rising at an alarming rate that is outpacing wages and making care unaffordable for working families. The Oregon Health Insurance Survey found that 8.2 percent of residents had trouble paying their health care bills in 2024. Increasing costs also put a strain on businesses and government agencies that pay for employer-based health coverage.

Reducing federal support for Medicaid and Affordable Care Act plans is expected to further increase health care costs and bump people off of their insurance.

What To Know

Oregon's legislature and OHA established the Sustainable Health Care Costs Growth Target Program in 2021 to report on cost increases across the state in an effort to mitigate health care spending. The program's goal is to limit health care cost growth to an average of 3.4 percent annually per person. Bartelmann said Oregon is one of eight states that enforce this type of program focused on affordability for consumers.

She said the state’s model takes a total cost of care approach that looks at all health care spending and helps control for price changes and utilization changes. It also brings both health insurers and providers to the table.

“It wasn’t focused on just one part of the system, it would say everyone has a shared responsibility,” she said. “We’re going to hold everyone accountable to the same target. Everybody should be pointed in the same direction.”

During the 2022 to 2023 evaluation, OHA evaluated the reasons why certain entities, like insurers, hospital systems and medical groups, had higher-than-hoped cost growth. Most had an acceptable reason, OHA said, like changing state and federal regulations, increased cost of frontline workers, high drug costs or increasing services to meet the community's needs. There were five entities, however, that OHA determined did not have an acceptable reason for spending more than the state targets.

The three insurance plans, one hospital system and one medical group include:

St. Charles Health System, which increased costs by 26.3 percent; ModaHealth Medicare Advantage insurance plans, which increased 15.4 percent; The Corvallis Clinic, which increased costs by 8.7 percent; PacificSource's commercial insurance plans, which increased 7.3 percent; and UnitedHealthcare's Medicare Advantage insurance plans, which increased by 6.3 percent.

For the first time, OHA can require improvement plans for organizations that cannot reasonably justify their high cost growth. OHA is only requiring St. Charles Health System, The Corvallis Clinic and PacificSource to submit plans.

The other two organizations are excused. OHA said ModaHealth's Medicare Advantage insurance plans don't need to submit a plan because they are no longer offered. OHA is also excusing UnitedHealthcare "so it can focus on holding its parent company, Optum, accountable in future measurement periods."

Bartelmann said OHA has provided some guidance for the improvement plans, including savings targets and strategies to address costs and provide savings. She added that some organizations want more guidance from the state than others, so OHA is still tinkering with the specific requirements.

“The cost growth target is just one transparency tool,” she said. “We’re adding in this accountability through the performance improvement plans and we might need to look at other tools. Health care is really complicated, and there are a lot of drivers and a lot of things happening.”

OHA recently launched a Committee on Health Care Affordability that is working on developing recommendations for those additional strategies, policies or tools to lower costs Bartelmann said the committee will deliver its first recommendation to the Oregon Health Policy Board next summer.

What Happens Next

The improvement plans will be submitted for OHA approval by the end of January 2026.

In 2028, OHA said it will begin issuing fines to health care organizations that consistently fail to meet their spending targets without an acceptable reason in three out of five years.

What People Are Saying

OHA Health Policy & Analytics Division Director Clare Pierce-Wrobel said in a statement: "Making health care affordable benefits everyone: People can more easily maintain their health, employers can better support their workers, and the health care industry can serve more members of their communities. As directed by state law, OHA's Sustainable Health Care Cost Growth Target Program provides additional transparency into what the state spends on health care. In the few cases where OHA finds cost growth is unreasonably high, the program follows thoughtful and gradual accountability standards. When the state, insurers, hospitals, providers and others work together, we can make health care affordable and accessible for everyone in Oregon."

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This story was originally published November 20, 2025 at 2:02 PM.