Establishes the Oregon Health Authority, which is the state Medicaid agency for the administration of funds and also is charged with carrying out the policies adopted by the Oregon Health Policy Board. The Authority is to study and recommend standards to the Legislature for the review of administrative expenses of health insurers, approval of rates, and enforcement of rating rules; structure Medicaid reimbursement rates to reward comprehensive management, efficiency and quality outcomes; and to create an all-claims, all payer claims database to provide comparative cost and quality information to consumers.