Editor’s note: Scott Street, President and COO of Mercy Health System of Northwest Arkansas, is the author of this guest commentary. It first appeared in the latest magazine issue of Talk Business Arkansas.

I anticipate 2013 to be a year filled with decisions that will reshape the delivery and financing of health care. It’s not an exaggeration to say that everyone associated with health services will see and feel some aspect of these changes. We should expect new elements in commercial health insurance, a new methodology for physician and hospital payments, new communications channels between providers as well as a complex public policy debate on the Medicaid program.

In the midst of the regulatory, financial, and structural transitions in the delivery of health services, the patient experience remains a high priority in the Mercy model of care.

Our determination is to meet the requirements of the Affordable Care Act, the new process that will come with the Health Benefit Exchange as well as the new payment procedures, all without detracting from the patient–physician encounter. Mercy is working hard to make strong patient satisfaction a part of a quality outcome. We use social media and Internet accessibility to interact with our patients. These tools will only grow in features and value as we seek to keep the patient first and access simple, predictable and highly friendly.

The critical health care items before the 89th Arkansas General Assembly in January 2013 will be expanding the eligibility for Medicaid and approval of an increasingly ambitious payment reform initiative.

The decision to expand Medicaid could open access to health services to hundreds of thousands of Arkansans* and generate an estimated $ 1.1 billion in additional services over the next 10 years. However, expanding Medicaid is a complicated decision that will impact the business community as well as individuals.

Mercy’s communications with our Senators and Representatives have been heartening. Our legislators are carefully examining all aspects of the Medicaid decision.

The forthcoming review and testimony this winter will strengthen the final decision. Mercy advocates for expanding Medicaid for the immediate benefit of 250,000 Arkansans, and we know our Senators and Representatives are digging into the issues to find a path to expansion that considers all 2.9 million Arkansans. Expanding Medicaid, which amends the state budget, will require a bi-partisan, 75% favorable vote of the General Assembly.

The Arkansas Payment Improvement Initiative is a Medicaid, Blue Cross and QualChoice project to improve quality, contain costs and move reimbursements from fee-for-service to episodic payment. The driving force behind the payment initiative is the unsustainable trend of the current Medicaid program, which faces a projected $298 million shortfall in FY2014. The progress of this project has been steady under the leadership of Governor Beebe and his health policy team.

Through the efforts of a number of Mercy executives and physicians, Mercy has aligned with the Medicaid component of the initiative to eventually impact the cost of care and improve the outcomes.

This payment initiative is the first step in a four-part public strategy to transform health delivery in Arkansas. The state’s innovative approach has gained national attention and has earned the support of the U.S. Department Health and Human Services.

A $60 million grant is pending to enhance primary care in Arkansas and to continue the expansion of the program to a comprehensive, all-Medicaid medical services program. While such a complete expansion will present challenges to Mercy and the entire state health industry, Arkansas is distinguishing itself as a leader in health system transformation.

Mercy’s mission to serve all members of the community, especially the poor and least represented, is well-aligned with the Arkansas Payment Improvement Initiative. We have been innovative around reducing costs, improving quality and increasing patient satisfaction. Our overriding focus in the public arena is to support a thoughtful transition from our current, fee for service system to the episodic payment strategy.

Much needs to be learned from this early stage of the initiative. While Arkansas Medicaid has embraced the provider perspective and input, there will be many more debates.

We must all focus on the new healthcare reality and ask how we place more emphasis on prevention and how we care for more sick people with fewer doctors and reduced resources.

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