Why the Oregon CCO experiment could founder

The most recent Oregon Medicaid experiment is the boldest attempt yet to limit health care spending. Oregon's approach using a Medicaid waiver from the Centers for Medicare and Medicaid Services utilizes global payments with two-sided risk at two levels-coordinated care organizations (CCOs) and the state. Equally important, the Oregon experiment mandates coverage of medical, behavioral, and dental health care using flexible coverage, with the locus of delivery innovation focused at the individual CCO level and with financial consequences for quality-of-care metrics. But insightful design alone is insufficient to overcome the vexing challenge of cost containment on a two- to five-year time horizon; well-tuned execution is also necessary. There are a number of reasons that the Oregon CCO model faces an uphill struggle in implementing the envisioned design.