Arkansas and Medicaid (Opinion)

Gov. Mike Beebe, in trying to avert a catastrophe in the making, has met unfair criticism of his suggestions aimed at shoring up Medicaid in Arkansas.

If nothing is done to curb escalating costs, the system, which provides health care to the least among us, will face a $60 million shortfall in 2012, soaring to $200 million the next year.

About 771,000 Arkansans, about 25 percent of residents, are on Medicaid. That’s an increase of more than 100 percent since 1995.

Costs, however, have soared by an even greater percentage, to $4.3 billion in 2010 compared with $1.2 billion in 1995. Although the federal government pays for more than three-quarters of that sum, the state of Arkansas still can’t keep up with its share of the expense.

The problem is not unique to Arkansas, but Beebe and state health officials are trying to avoid the Medicaid deficits faced by other states. Some of those states have cut reimbursement rates or sought to eliminate beneficiaries of the program, children included.

The crux of the governor’s idea is this: a move from the current fee-for-service model to a system in which health-care providers treat “episodes” of illness and the creation of “health homes” for patients, partnerships of health-care providers whose focus is on that patient.

This is not an unheard-of approach. The federal health-care reform act calls for the creation of demonstration projects, or pilot programs, in both Medicaid and Medicare that would develop and evaluate a “bundled payment” system.

This system would pay providers based on episodes of care. For example, an acute illness like a heart attack would be considered one episode. Treatment — and payment for that treatment — would be based on that episode.

That compares to a separate payment for the preliminary diagnosis in the emergency room, a separate payment for an EKG, a separate payment for hospitalization and a separate payment for surgery.

Some health-care reformers think the bundled payment system would not only curtail costs but result in better outcomes for the patients because it necessitates the coordination of care. The bundled payment system also seeks to improve patient outcomes in cases of chronic disease such as diabetes, an illness that has exploded in recent years, particularly in the United States.

The common thread in this approach is care, and payment, that focuses on the patient, the illness and the outcome. The current fee-for-service system often seems much more focused on here a test and there a test, here a primary care doctor and there a specialist — none of which and none of whom are necessarily sharing information. Such an approach, in effect, forces patients to coordinate their own care, most often at a time when they are vulnerable.

The proposals Beebe and state health officials are making explicitly seek to avoid cuts in benefits and provider fees. They are working to avoid casting from Medicaid’s rolls those who need medical help.

We think the governor should be commended for thinking ahead, for trying to avoid the financial abyss just down the health-care road. And those who don’t like his proposals to tame health-care costs should come up with their own and have the confidence to express them.