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The Oregon Health Plan was once viewed as an emerging national model of how to provide quality care to low-income residents. A software scandal and indefensible PR proposal are setbacks, but the right person at the top can provide the vision needed to restore the institutional health of a key state agency.

On Thursday, having been shown the exit door by her boss, Lynne Saxton will officially end her tenure as director of the Oregon Health Authority.

Gov. Kate Brown had little choice but to usher out the already beleaguered Saxton after Portland Tribune reporter Nick Budnick revealed the agency had proposed a smear campaign against a Portland health organization that had been long been griping about reimbursement rates.

Saxton initially distanced herself from the "communications plan" to use lawmakers and reporters to sully the reputation of FamilyCare, one of the 16 Coordinated Care Organizations (CCOs) that provide Medicaid coverage under the Oregon Health Plan.

But among the public documents Budnick pried loose was an email showing Saxton cheering on the idea. Saxton might have survived news of a stupid idea, but the botched coverup sealed her fate.

Picked for the post by former Gov. John Kitzhaber in December 2014, Saxton — a Republican with private-sector experience — was viewed as someone who could trim some of the red tape around an agency with the largest budget in state government.

"The governor picked an excellent person in Lynne Saxton as the new director," one health care executive told the Lund Report at the time. "She'll bring a high level of administrative skill and fairness to the organization. There is a tremendous need for culture change, and she has the ability to bring about that change, and make the agency a valued partner in bringing health to all Oregonians."

That fan was Jeff Heatherington, president and CEO of FamilyCare. Five months later, he filed a lawsuit against the state, saying Saxton's agency failed to provide information about why it slashed his company's reimbursement rates.

But that strained relationship is just one of the huge challenges facing whoever Brown taps to replace Saxton.

The agency is still reeling from the $300 million Cover Oregon software debacle.

A new round of contracts with FamilyCare and other CCOs is coming up. Without strong and credible leadership, it will be hard for the agency to hold these Medicaid contractors accountable for improving the health of their customers.

Some Republicans, seeking to capitalize politically on Saxton's folly, have called for a legislative investigation.

That's not necessary. If you want a model for real oversight of the agency, look no further than Oregon House Office 493, where Rep. Mitch Greenlick hangs out. Greenlick, a Northwest Portland Democrat who chairs the House Health Care Committee, for years has sought to engage in productive oversight of the state's Medicaid establishment with a series of hearings and legislation. But his ideas, including more transparency and a ballot measure restricting Medicaid-funded campaign contributions, received scant backing from Republicans or his own party, and were beaten back by the CCOs.

And Greenlick hasn't gotten much help from the agency itself.

As Budnick's subsequent reporting has demonstrated, Medicaid reform has regressed under Saxton's tenure. Hired to tame the bureaucracy, Saxton became even more dependent on it, rejecting the vision of a partnership between locally based CCOs and the state agency. She opted instead for a top-down, control-oriented management style.

Not coincidentally, most of the longtime key managers who understood the original vision of the Oregon Health Plan — and the nuts and bolts of how CCOs work — are gone.

All of that will make Saxton's successor's work more difficult — but also more important.

For now, that task falls to Pat Allen, who Gov. Brown plucked from the Department of Consumer and Business Services, as acting OHA director.

Allen, who's headed the Department of Consumer and Business Services for six years, told the Portland Tribune last week that he'd like the job permanently. We urge the governor to give him some time to mend relations with the CCOs and get a handle on how many ineligible Oregonians are getting coverage and, more important, how many Oregonians who quality for care are not getting it.

The Oregon Health Plan was once viewed as an emerging national model of how to provide quality care to low-income residents. A software scandal and indefensible PR proposal are setbacks, but the right person at the top can provide the vision needed to restore the institutional health of a key state agency.

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