Incubator. Accelerator. Petri dish. Risk-taker.

Portland, Ore., the nation’s 28th largest city, has a longstanding reputation for disrupting the status quo by trying things that most other cities won’t dare to attempt.

The first community bicycle-sharing program in the U.S. launched in Portland in 1994, and the city was at the forefront of the local fresh-food movement and microbrew craze now sweeping across the nation. Portland regularly is ranked among the most walkable, transit-friendly and green places to live in the nation.

Located not far from the end of the famous Oregon Trail, Portland today is eyeing another and even more complex industry to be transformed through innovation: Healthcare.

“There’s a tremendous creative class in Portland that is fostering a lot of innovation and entrepreneurship,” says Mark Friess, founder and CEO of WelVu, an innovative patient engagement platform that uses videotaped office visits with physicians to improve patient education. “At the same time you’ve got a really strong health system and professional base within the city that is growing.”

Portland is a technology and life sciences hub. Its healthcare landscape is anchored by Oregon Health & Sciences University — a premier training ground for medical professionals and a research juggernaut — and by nationally recognized integrated health systems, including Providence Health & Services, Legacy Health and Kaiser Permanente.

Healthcare innovators cite a landmark local company for their inspiration and fearless approach to seeking solutions to their industry’s most vexing problems: Nike. Phil Knight, founder of the Portland area-based athletic footwear and apparel manufacturer, took an old product – the shoe – and transformed it into a desirable global brand. Today, Nike is synonymous not just with sneakers but with peak athletic performance.

Similarly, healthcare is an old system that today is ripe for innovation because of its lingering high costs and stagnating performance on quality and safety. As local healthcare leaders see it, the job to be done in Portland is lowering the cost of care while improving quality and safety. To do that, they are reinventing how that care is delivered and paid for. Culturally, the city welcomes individuals and organizations that are willing to tackle that job to be done rather than shunning them.

As the largest city in a state that’s willing to gamble on new approaches to healthcare, Portland is becoming America’s test kitchen for new ways of delivering and paying for healthcare services. National policymakers are closely watching several innovative projects in Oregon, which are showing encouraging results. These include:

  • Medicaid expansion: Oregon expanded its Medicaid program in 2008 by 10,000 people via lottery, giving health policy researchers and the state a unique opportunity to study the costs and benefits of the expansion. This Oregon Health Insurance Experiment, as the study is called, is tracking health service utilization among Medicaid recipients compared to the uninsured who did not win Medicaid coverage via the lottery. Findings from the first two years indicated that Medicaid recipients used more health services than the uninsured and were more likely to be diagnosed with chronic illnesses such as diabetes. Medicaid coverage boosted preventive care use—including an increase in cholesterol monitoring by 50% and a doubling of mammograms. Medicaid coverage reduced depression rates by 30%.

  • Population health management: In 2011, the Oregon state legislature passed a bill that created incentives for providers to develop integrated care networks for Medicaid patients to reduce costs and improve outcomes. These Coordinated Care Organizations (CCOs) operate similarly to their more famous counterparts nationally, Accountable Care Organizations (ACOs). Each Oregon Medicaid patient in a CCO is assigned to a care team responsible for overall care and outcomes. Initial findings from the first nine months of the program show primary care visits rose by 18% among participants while emergency department visits dropped by 9%.

Initial success of both the Medicaid expansion and the CCOs shows teamwork inherent to Portland’s mindset, says Shelley Bailey, the co-owner of Central Drugs pharmacy in Portland. “Our ability to communicate and collaborate is very strong in Portland.”

To wit, the 111-year-old Central Drugs pharmacy isn’t just a place where customers get their prescriptions filled and pick up a few essentials before they head home. The pharmacy serves as a “connector,” linking up its customers to other needed healthcare resources in Portland, according to Bailey. The role as connector is particularly crucial for Central Drugs, as its typical customer is a low-income person with HIV who needs multiple healthcare interventions.

Portland also is making a name for itself in the field of medical research. For example, OHSU’s Knight Cancer Institute, named after Nike’s Knight, has launched a $1 billion campaign to end cancer. Knight and his wife Penny have pledged $500 million in matching funds towards the campaign.   

“In the next 10 years, you are going to see Portland emerge as a significant player around the world in the life sciences,” Friess says.

10 Things to Know about Portland