The Oregon Decision to
Curtail Funding for
H. Gilbert Welch and Eric B. Larson
In the spring of 1987, the Joint Ways and Means Committee of the Oregon legislature faced a painful choice. The Division of Adult and Family Services, charged with administering the state Medicaid program, framed the options for the next two years. During the next biennium—the basic funding period in Oregon—Medicaid could either extend its funding for basic health care to include about 1,500 persons not covered previously, or continue to fund a program of organ transplantation (bone marrow, heart, liver, and pancreas) for a projected thirty-four patients.
In a dramatic example of the type of painful decision necessitated by limited resources, the division advocated the former, and the committee concurred. This report chronicles the events leading to the decision, the public reaction, and the state's response. Finally, we discuss several lessons drawn from the experience in Oregon.
Still recovering from the recession of the early 1980s, Oregon is one of the few states in which voters have approved limits to state revenues and expenditures. Within the framework of a constitutional mandate requiring a balanced budget, the legislature hoped to improve access to basic health care for low-income Oregonians in the biennium 1987 to 1989. Although some monies were avail-____________________