Regence HMO Oregon

M. Casey, I. Moscovice

Research output: Contribution to journalArticlepeer-review


Regence HMO Oregon is a large IPA-model HMO based in Portland, Ore. It serves commercial, Medicaid, and Medicare cost enrollees throughout Oregon and southern Washington. An affiliate of Blue Cross and Blue Shield of Oregon, Regence HMO Oregon built its rural enrollment by acquiring Capitol Health Care, an HMO with rural enrollment; by encouraging rural employers with traditional Blue Cross and Blue Shield of Oregon indemnity and PPO coverage to switch to HMO coverage; and by aggressively contracting with providers statewide to serve Oregon Health Plan (Medicaid) enrollees. Implications for Rural Providers, Employers, and Enrollees. Physicians. The rural physicians interviewed express general satisfaction with their Regence HMO Oregon relationships, but they have some concerns about the HMO's reimbursement methodology and the usefulness of the data they receive from the HMO. The risk pool component of Regence HMO Oregon's current PPG reimbursement system is not easy to understand, and some physicians in PPGs that are not financially integrated dislike having their reimbursement negatively affected by utilization patterns of physicians over whom they have no control. In addition, IPAs are demanding that Regence HMO Oregon provide them with access to claims data. Future physician satisfaction with Regence HMO Oregon will be influenced by the HMO's choice of reimbursement methodologies for rural providers and by the extent to which the HMO produces and shares useful data with IPAs and individual physicians. Whether it uses those data to identify providers with quality problems and, potentially, to eliminate them from the HMO network also will be a factor. Hospitals. The rural hospitals visited reported concerns similar to those of the rural physicians. Neither hospital regards the data they receive from Regence HMO Oregon as useful. The HMO's reimbursement rates are a concern to one hospital. Both hospitals support joint hospital-physician organizations as a means of obtaining leverage in negotiations with managed care plans. One of the rural hospitals is part of an integrated delivery system that negotiates for the hospital and physicians jointly with Regence HMO Oregon, and the other is developing a PHO for the purpose of negotiating managed care contracts. Employers. A common theme that emerges from this case study is employers' focus on cost as their primary reason for offering an HMO product. Many of these rural employers are willing to change types of coverage or insurance carriers to achieve cost savings. At the same time, they acknowledge that these changes can be difficult for employees and time- consuming for employers and are, therefore, not actions they want to undertake frequently. Five of the six employers have work forces that are either partially or fully unionized. In four cases, multiple unions are involved. Even among employers with unionized work forces, however, the degree of formal employee involvement in the health plan selection process varies considerably. Neither small employer (one unionized and one nonunionized) formally involves employees in the selection process, while all of the larger employers do. The three large employers that offer Regence HMO Oregon also offer at least one other Blue Cross and Blue Shield of Oregon product, illustrating the advantage that those plans have in marketing to larger rural employers that want to offer their employees multiple options. Through Blue Cross and Blue Shield of Oregon, employers can offer the choice of indemnity or PPO coverage as well as HMO coverage, while avoiding the administrative costs of contracting with multiple entities. Enrollees. Overall enrollee satisfaction with Regence HMO Oregon is high. Enrollees are especially satisfied with the HMO's cost, coverage of preventive care, and large provider network. Some enrollees have had problems with restrictions on specialty referrals and delays in HMO payments for hospital and emergency care.

Original languageEnglish (US)
Pages (from-to)244-256
Number of pages13
JournalJournal of Rural Health
Issue number3
StatePublished - 1998


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