New system in Ark. emphasizes health care quality

LITTLE ROCK, Ark. -- Arkansas'Medicaid program and private health insurers announced a plan Thursday to control health care costs by paying providers for successful outcomes and not by the number of times a doctor sees a patient.

Arkansas Department of Human Services Director John Selig spoke with executives from major health insurance providers in Arkansas to promote the initiative, which will focus on disease management, better aftercare for patients and improved communication among doctors, therapists and other providers.

The plan was developed with input from physicians, insurers, state officials and others as a way to get a handle on costs while not reducing the fees that providers receive. The first changes begin in July _ though the full program will take years to roll out.

The program isn't tied to the federal health care law that was upheld Thursday by the U.S. Supreme Court, but Selig said the changes will help the state save money in implementing the federal plan.

Selig said there are tremendous inefficiencies in the system that need to be removed to bring down costs.

"Health care in this country doesn't work particularly well," Selig said.

The group found that a large number of patients hospitalized with congestive heart failure wind up back in the hospital in a relatively short amount of time. The new system will focus on getting that patient proper follow-up care and, through electronic health records, help the specialist better communicate with the patient's general practitioner. Supporters said that should reduce the number of patients heading back to the hospital.

State Medicaid Director Andy Allison said the state won't dictate to physicians how to treat their patients but will instead work to lower average costs, with savings passed on to providers. Providers with unsatisfactory outcomes may have to return some money, he said.

The state has been working with federal Medicaid officials, and Allison said the regulators have been enthusiastic about the changes the state is putting in place. The federal regulators will have to approve the various aspects of the Arkansas plan.

As the number of patients with insurance or in the Medicaid program grows, the state and private insurers will be better positioned financially to take on more people, the officials said.

Selig noted that a number of states have handed management of their Medicaid systems to private companies. Arkansas is taking a different tack.

"We wanted to focus on getting rid of inefficiencies (and) spend our health care dollars well," he said.

Stephen Spaulding, a vice president at Blue Cross and Blue Shield, said the insurance companies aren't trying to lower what they pay physicians and other providers to Medicaid rates.

"We're trying to pay better, not pay less," Spaulding said.

Dr. William Goldman, medical director for the state Medicaid program, said there is plenty of room in the plan for different treatments for patients with similar illnesses.

"We're not requiring everybody get the same care every time," he said.

Goldman said that 60 percent of patients treated for a sore throat leave the doctor's office with an antibiotic prescription, yet only a small percentage actually have a bacterial infection. Identifying the patients who actually need the drug will cut costs, ensure patients receive proper treatment and reduce unnecessary use of antibiotics, he said.

Launching in July will be five treatment areas in which the state and the insurers will try to contain costs: hip and knee replacements, pre- and post-natal care, upper respiratory infections (colds and sore throats), congestive heart failure and attention deficit and hyperactivity disorder.

The idea is to eliminate inefficient care and overtreatment, and promote proper treatment. More categories will be added as time passes and the system is refined.