Explanation
I only worked for this paper for a few months, and not long after I left, it folded. Considering I only worked there a few months, I certainly have a lot to say about it, even after six years.

The paper had been owned by Eagle Newspapers Inc., a company which owned by Denny Smith, onetime member of the U.S. House of Representatives from Oregon, and in 1994, a Republican candidate for Governor of Oregon. Ironically, after accepting this job and only days before starting work at one of Smith's newspapers, I had volunteered to help run a pair of political events for John Kitzhaber, who would go on to defeat Smith in November of 1994 in the election for Governor. I doubt Smith had any idea one of his employees was working for his political opponent. This was my one and only real involvement with any political campaign.

I joined the Business Journal in January of 1994, and left two months later. Not long after that, the Editor-in-Chief, Pamela Andrews-Hulse, tried to buy the paper from Eagle. From what I heard, they refused, and then fired her. She then turned around and started The Cascade Business News, to compete with the Business Journal. The new paper basically kicked the stuffing out of the old one, and later that year, Eagle folded the Business Journal.

Of course those little anecdotes have little to do with the story that follows. This story focuses on some complaints by local pharmacists about some changes coming down as a result of the Oregon Health Plan, which was John Kitzhaber's big legislative initiative as Speaker of the Oregon House of Representatives, which he used as a springboard to the Governor's mansion.

Pharmacists Take Issue With Health Plan
Issues of consumer choice and exclusionary practice noted
By Arik Hesseldahl
Staff Writer

Bill James has a bone to pick with the Oregon Health Plan.

As one of the few area pharmacies that regularly delivers prescriptions, James is worried that welfare patients will not get the pharmacy services they need because of a provision in the plan that excludes pharmacists like him from filling welfare prescriptions.

As of Feb. 1, the Oregon Health Plan began to exclude independent pharmacies and several chains from filling the prescriptions of an estimated 9,200 Medicaid recipients in Central Oregon.

Bud Rose of Bend's Rose pharmacy is not happy either. Between April 1 and December 31 of 1993, he filled 5,401 prescriptions for welfare recipients. As the health plan is phased in between now and January, those patients will be going to PayLess drug stores for medications.

Rose is not only unhappy about losing so much business. He doesn't want his patients to lose their freedom of choice.

In Deschutes, Jefferson and Crook counties, the health plan is administered by HMO Oregon, a health maintenance organization that has a contract with the PayLess to fill all prescriptions for area welfare recipients in areas of the state where a PayLess store is located. In Madras, the HMO has contracts with Safeway and Thrifty Drug, and in La Pine with La Pine Drug. That means Medicaid patients in Central Oregon must get their prescriptions filled exclusively at those drug stores. The changes have already affected as many as 3,400 people, and will eventually include another 5,800 working people who are below the federal poverty line, and an additional 1,000 senior citizens and disabled people in the program.

The change does not affect those with private insurance or those on Medicare.

Both Rose and James are upset they didn't get the chance to even try and participate in the program, and they feel their regular Medicaid and welfare customers will lose out in the end.

"I just hope for the sake of the patients that PayLess and the others will be able to give them the help they need," James said "With such a sudden influx of new customers, it's certainly going to be a problem under the current setup. I would have to question if they can provide the same level of service."

The two pharmacists are not alone. Statewide, numerous independent pharmacies, and many regional and national chains have been excluded from participation in closed contract plans.

Chuck Gress of the Oregon Pharmacists Association (OPA) said the issue is not only the exclusion of certain pharmacies from doing welfare business, but one of consumer choice, and the OPA has taken their fight to the state legislature only to be stonewalled.

"We've tried to get legislation passed during the last four sessions that would allow the corner drug stores to participate if they agree to the same payments, but HMO Oregon shuts them out saying they don't care to let them participate. It certainly has the premise of a monopoly," Gress said.

The OPA is currently lobbying the legislative candidates to support a bill next session that would allow all pharmacies, both independent and chains, to participate in the state health plan if they pay the same price to drug manufacturers, which in turn would equalize the prices for consumers. This legislation has to be referred to as the "any willing provider" (AWP) proposal.

"The only avenue we really have open to us is legislation," Gress said. "Other than that, we can make a lot of noise, but no one will listen."

One place that noise is being heard is Associated Oregon Industries, Oregon's largest lobbying organization.

Insiders say the problem with AWP is that providers contract with employers, or in this case, HMO Oregon, to provide care based upon a set projected volume of demand. To allow more providers into the picture reduces the overall amount of business each provider can expect.

"It cuts the bottom out of the contract and eliminates the contractor's ability to project the volume of their demand," said Kevin Earl, a lobbyist with Oregon Associated Industries. "There's less demand for each provider so it frustrates the employers and insurers who are trying to cut health care costs by using a volume purchasing agreement.

"From my perspective, it is anti-managed care legislation because it make it virtually impossible to negotiate contracts that will allow you to manage health care costs. Providers would be reluctant to agree to a contract without any level of certainty of demand," Earl said.

Ken Strobeck, public affairs director for HMO Oregon who also happens to be a Portland area candidate for the state legislature, called the managed care arrangement a "trade off."

"It's a tradeoff over whether you want freedom of choice or cost containment," Strobeck said. "Traditional fee-for-service medical plans offer complete freedom of choice. As a member of an HMO you stay with a list of contractors. PayLess is the pharmacy that we as an HMO have contracted with."

One example of that trade off is the fact that James regularly makes prescription deliveries to people who for some reason cannot come in to his drug store. He estimated that he makes 200 to 250 deliveries each month, and that many of those are to welfare patients.

"It's my understanding that PayLess only make deliveries in emergencies, unless they've changed their tune," James said. "Those are the people I am most concerned about."

PayLess executives say they have not ruled out starting prescription deliveries.

"At the present time we do not do deliveries. There are PayLess stores that deliver, but we have to evaluate the process and find out what kind of demand there is for it here," said Richard James, pharmacy manager of the northeast Bend PayLess store, who is not related to Bill James.

James also thinks that PayLess will handle the increase in business and still provider a higher level of service.

"I don't think it's going to be any problem for us," he said. "We have a good resource of people. ...we are required by law to counsel our customers on their prescriptions and answer their questions. We have a lot of people that are happy with us, but it's like any other business. You can't please everyone all the time. I'm here to make sure the process works, and that it works right."