Gov. John Kitzhaber won a third term in office, in part on his promises to revamp, for the second time, the state"s health care system.

During the 2011 legislative session, Kitzhaber made some big steps toward that goal. He was able to persuade lawmakers to launch two major parts of his health care overhaul: Creating a health insurance exchange system and setting up a system of "coordinated teams” of doctors, nurses, dentists and other providers to focus on prevention before more expensive emergency care is needed.

There were a couple catches, though. President Obama's health care law was still winding its way through the court system and the federal government hadn"t yet signed off on the state's plans.

A few months have meant a world of change. In May, the governor flew to Washington, D.C. and returned home with news of an agreement with the federal government.

The Obama Administration allowed the governor's plan to move forward. In a complicated deal, the feds said they would direct some $1.9 billion to the state over the next five years. That cash is supposed to help subsidize the transition to the new system.

Just a couple weeks ago, the Supreme Court ruled the federal health care reform bill was constitutional. Thought it's difficult to say how, exactly, striking the law down might have affected Oregon's plans, it certainly would have had an impact on the health care exchange front, according to spokesman Tim Raphael. The coordinated teams piece would have continued forward as planned. None of that much matters now, though, as the law still stands.

WIth both of those barriers out of the way, we have a Promise Kept.

While running for governor, Kitzhaber promised to "set up a large demonstration project in Oregon that fundamentally shifts the way health care is organized and delivered ... and ask for a broad waiver from the federal government to give us permission to actually do that."

He's accomplished both pieces of that promise.

When he was but a mere Senate president, John Kitzhaber created the state's version of the federal Medicaid program for poor people. When he ran for governor for the third time, in 2010, Kitzhaber promised again to revamp the health care system in order to treat more people for less.

He said in a speech before the Oregon Medical Association that he will "think about in the next couple years … how we would set up a large demonstration project in Oregon that fundamentally shifts the way health care is organized and delivered ... and ask for a broad waiver from the federal government to give us permission to actually do that.”

Kitzhaber needed legislative help to launch two major parts of his health care overhaul: creating a health insurance exchange system, and setting up a system of "coordinated teams” of doctors, nurses, dentists and other providers to focus on prevention before more expensive emergency care is needed. Lawmakers approved both concepts before they adjourned June 30.

House Bill 3650, which sets up health care teams, would apply first to Medicaid members of the Oregon Health Plan. "Under the measure, the state would offer lump-sum contracts to teams that would be called coordinated care organizations with freedom in how they spend the money,” explains Oregonian reporter Bill Graves.

Their task is to treat people with chronic health problems, such as asthma, diabetes, and substance abuse, with regular, cheaper care so they don't end up in the hospital with pricier, more urgent needs.

Senate Bill 99 sets up the Oregon Health Insurance Exchange Corporation, a state-run public corporation that will offer insurance plans to families. Under President Obama's health care overhaul, residents must buy insurance or face a federal fine, and states can either choose to set up their own exchanges or use one imposed by the federal government.

Oregon opted to set up its own exchange. The exchange will allow people without insurance to shop for coverage from commercial plans that meet government standards. Low-income residents will get government help to pay their premiums. The exchange initially will be open to individuals and businesses with 50 or fewer employees. In 2016, it will open to larger employers. State officials estimate 143,000 individuals and 65,000 small businesses will buy insurance in the exchange in 2014.

With these two pieces firmly in place in 2011, Kitzhaber may be well on his way to delivering a new system of health care delivery that could earn federal approval.