Arkansas Health Partners

Arkansas Blue Cross and Blue Shield, Washington Regional Medical Center and Sisters of Mercy began working on a joint effort last year, modeling their plan after one already in place at Hot Springs. Recently, officials from the three groups held meetings with physicians, business leaders and the media to announce the name of their venture: Arkansas Health Partners.

The plan, among other things, is supposed to reward doctors for providing high quality and economical care, which sounds very similar to capitation. Arkansas Health Partners officials say it’s not, although it’s likely capitation eventually will be used in Northwest Arkansas.

Capitation is a payment system in which providers – physicians or hospitals – are paid a lump sum for agreeing to care for a group of patients. The providers do better financially if their patients require little or no care, and there’s concern among many physicians that such a system encourages “cherry picking” in which the most-ill patients are dropped by providers concerned about their economic returns.

Dr. Bruce Waldon, medical director for Arkansas Health Partners, recognizes the concern. He says results are “severity-adjusted,” so that physicians with extreme cases aren’t penalized. The financial-incentive system is designed to turn back profits to both physicians and to members in the form of lower premiums.