Oregon state lawmakers approved legislation on June 30 that will begin a sweeping transformation of general health and mental health services in the state, including creation of regional "coordinating care organizations (CCOs)" responsible for organizing the delivery of all health services.

The bill, signed into law the next day by Oregon Gov. John Kitzhaber (D), who is a physician, aims to consolidate the managed care plans that administer the Oregon Health Plan into regional CCOs, which lawmakers expect will better manage chronic conditions and preventive care. CCOs are the state's term for what have elsewhere been called accountable care organizations (ACOs)—made up of coalitions of hospitals, health systems, physicians, and other health care providers as a new model for delivering coordinated, cost-effective care. As with ACOs, Oregon's CCOs would be charged with creating savings through coordination of care, and participating provider panels would share in those savings. (For a summary of the legislation provided by the Oregon Health Plan, see Facts About New Oregon Law).

"The legislature's action today is critical to ensuring that Oregonians get better health care at a lower cost," Kitzhaber said in a statement issued at the signing. "The strong bipartisan support for this landmark legislation demonstrates how effective we can be addressing the real issues facing Oregon when Democrats and Republicans come together."

In 2009, Oregon approved a health system reform bill that anticipated in many ways the features of the federal health care reform law, creating health insurance exchanges for the state and a new Oregon Health Policy Board responsible for implementing the health care reform provisions. However, the state—still reeling from the economic downturn that began in 2008—is facing a $3.6 billion deficit, and Kitzhaber came into office arguing that sweeping changes in the delivery system were needed before the state could move toward universal health coverage of its citizens envisioned in the state's reform bill.

A Transformation Team was created in December 2010 and charged with devising a comprehensive redesign of Oregon's health delivery system. A timeline was established that envisions implementation of a newly designed delivery system by January 2013.

A March report by the Transformation Team to the legislature outlined the composition and function of CCOs. Notably, the team report stated that CCOs should prioritize services for patients "with high needs and multiple chronic conditions, mental illness, or chemical dependency to involve them in accessing and managing appropriate preventive, remedial, and supportive care and services."

Oregon psychiatrist David Pollack, M.D., who is on the board of the American Association of Community Psychiatrists, told Psychiatric News that the plan also includes a major emphasis on clinical integration of mental health and primary care and implementation of primary care homes (Psychiatric News, May 6). Pollack has been involved in planning teams for the reorganization and said that the vision of the Transformation Team "heavily promotes the use of primary care providers and primary care medical homes, and we have articulated very clearly that mental health has to be included in these primary care homes."

The history of the law and its text are posted at <http://gov.oregonlive.com/bill/2011/HB3650/>.