Nov. 4, 2025
We see it in the headlines: Oregon hospitals are struggling. After years of not being able to make ends meet, they have been forced to make tough choices to cut services and lay off staff.
The ripple effects of these decisions impact us all, with services farther away from home or unavailable and with necessary medical appointments sometimes only available months into the future. These are symptoms of a system in crisis. Oregon’s health care system is on an unstainable path and needs urgent intervention.
H.R. 1, the federal tax legislation passed this summer, will have significant and negative impacts on Oregon’s budget and health care system. As legislators and agency officials begin to grapple with their new post-H.R. 1 funding reality, it’s critical they focus on strengthening the foundation of health care funding in our state—a strong, vibrant economy.
In Oregon, hospitals are often the largest or among the largest employers in their regions. Though we hang our hat, and rightfully so, on being home to companies like Intel and Nike, Oregon’s largest employer is Providence. In the Portland metro area, the hub of economic activity for the state, three of the five largest employers are hospitals.
With hospitals employing nearly 70,000 people and generating $32.4 billion in economic activity, it’s clear they are major contributors to our economy. But their success hinges on a thriving private sector.
Just as we can’t have a strong Oregon without strong hospitals, we also can’t have strong hospitals without a strong economy. It’s that simple. A healthy economy fuels strong employers and strong employers are the backbone of a health care system that works for everyone.
Why? Because as Oregon Business & Industry notes, the private sector generates the economic activity that funds wages, philanthropy, and government services. When it comes to health care funding, the private sector pays the taxes that support Oregon’s state government, including publicly funded safety net health care programs. And as importantly, the private sector provides good jobs with good commercial health insurance.
This matters because in Oregon we rely heavily on the commercially insured population to help cover the cost of care for everyone.
State policies have systematically underfunded our health care system assuming that others—mainly people with commercial health insurance—will make up the difference. Today, the Oregon Health Plan and Medicare pay hospitals just $0.56 and $0.71 cents per dollar of cost, respectively.
The consequence is clear: Oregon’s health care system leans heavily on commercial payments. But the commercially insured population is smaller than the national average—just 51% of Oregonians compared to more than 65% nationally—and continues to shrink. That means a smaller and smaller slice of the population is shouldering an ever-growing share of health care costs, putting enormous pressure on both hospitals and the broader system.
With the state’s economy losing steam, this problem is only going to get worse. So far this year, Oregon has lost more jobs per month than it did during the Great Recession. Key sectors like manufacturing have slumped. Good jobs are hard to find in many areas of our state.
Faced with both our hospitals and our state’s economy on shaky ground, we need state agencies and our legislators to work together to change this trajectory. Without course correction, Oregon won’t be able to weather the looming cuts resulting from H.R. 1.
The good news is that many of the issues straining the economic health of both hospitals and businesses can be addressed at the state level. There is an opportunity for the state to get Oregon back on track.
Earlier this year, Oregon Business & Industry released its Regulatory Impact Analysis. It found that across sectors, Oregon businesses are among the most regulated in the nation and that each year businesses are facing new, additional hurdles challenging their ability to compete in their respective markets.
These findings echo the challenges we face in health care where Oregon hospitals are subject to more than three times the number of regulations than the national average. Many of these policies, while well intended, have resulted in higher costs for patients while not improving their quality of care.
The state’s patchwork approach to regulation is draining Oregon of its economic vitality. Instead of being leading edge, it has positioned Oregon to be on the leaving edge as we see services, businesses, and our population vote with their feet and choose to grow elsewhere.
Fixing health care in Oregon starts with strengthening our economy. By supporting our businesses, we ensure a strong foundation for a health care system that works for everyone.
