Mental health in the Oregon Health Plan: fragmentation or integration?

The Oregon Health Plan was implemented in 1994 with a 50% expansion of Medicaid enrollment to include some of the working poor. Over 75% of Oregon Medicaid clients are now enrolled in health maintenance organizations (HMOs). Outpatient chemical dependency services have been capitated since May 1995. Capitated mental health services have been provided for the 25% of eligibles who live in demonstration counties since January 1995. Expansion and capitation appear to have been achieved without major trauma. More challenging has been the attempted integration of public sector behavioral health services with private sector health plans. Stakeholders interviewed for this study were especially concerned about the long-term impact on Medicaid clients with chronic mental illness. Strong leadership and clear policies regarding the mixture of public, private nonprofit, and private for profit entities are necessary if the state is to achieve its aim of integration without fragmenting a system of care for people with severe mental illness.