Oregon Initiative — Patient Protection Act of 1996

Thomas W. Mann
Article Type: 
Report from the States
Summer 1996
Volume Number: 
Issue Number: 

With the goal of stopping the use of capitation as a method of paying health care providers in his state, Salem Oregon ophthalmologist, Dr. Gordon Miller, has circulated a citizen initiative petition banning the practice, and claims to have enough signatures to place the issue before the Oregon voters in November 1996.

The Patient Protection Act of 1996, as it is called, limits the way a health care provider ay be paid to five methods: work performed, an hourly wage, prearranged salary/benefits, bonuses based upon work performed, and reimbursement for expenses. Provider capitation is not an allowable method under the provisions of the measure.

“Capitation has forced physicians to choose between ethical and unethical practice of medicine,” Miller explains. “Instead of being the patient’s advocate in the traditional covenant relationship, capitation forces the withholding of care at some level which violates the ethical code physicians have followed for more than 2500 years,” Miller said. “The new ethic is the veterinary ethic where we provide whatever medical treatment the owner or master is willing to pay for, not necessarily the care the patient needs. That’s simply immoral,” Miller contends.

As expected, opponents to Dr. Miller’s initiative have begun to coordinate their effort to kill the issue at the ballot box, and have promised to spend millions of dollars to fight the Miller proposal. If unsuccessful, opponents have vowed to challenge the measure in court.

“I have four main problems with capitation,” Miller said. “First, physicians can get paid for not working. Second, the physician takes all the financial risk for the patient’s health care without having a risk pool. Third, the ethical physician, if he expects to see patients, must meet the contract price of the unethical physician who is willing to withhold care. And lastly, capitation lends itself to the corporate takeover of medicine, with investors not doctors calling the shots,” Miller outlined. “As someone once said, ‘There is never a right way to do the wrong thing,’ ” Miller noted.

According to the initiative, insurers are the only ones who will still be able to receive capitated payments. Any health care provider or health care contractor who violates the provisions by continuing provider capitation will have his professional and/or business license suspended until compliance is achieved.

In describing his initiative, Dr. Miller relies heavily on ethical arguments. “Health care providers have an agency responsibility to their patients,” Miller explained. “The fiduciary responsibility is mutually exclusive when it comes to providing ethical health care to those who need it. However, the push is to give the provider both agency and fiduciary responsibility for their patients which results in an ethical dilemma,” Miller said.

Pressed about the financial consequences of his initiative, Miller said there should be no impact whatsoever. “If capitated providers are providing all the care their patients need as they are claiming they are, what difference financially does it make if they’re capitated or fee for service?” Miller asked rhetorically. However, if there is withholding of care it may cost them more to actually do the work,” he said.

Miller says he is planning to turn in his signatures to the Oregon Secretary of State by the end of the month. The statutory measure needs 73,216 qualified signatures to be placed on the November 1996 general election ballot. “We’ll have that and more,” a confident Miller indicated.

Mr. Mann is the campaign manager for Oregon Initiative/Patient Protection Act of 1996. For further information, he can be reached at P.O. Box 5927, Salem, OR 97304, (503) 370-1318.

Originally published in the Medical Sentinel 1996;1(2):29. Copyright©1996 Association of American Physicians and Surgeons (AAPS)



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