Governor Details Healthcare Payment Reform Path in Arkansas

Christopher Cheney, April 21, 2014

In a display of unprecedented cooperation and compromise, Arkansas is on the verge of creating the country's first public-private, universal payer, value-based healthcare delivery system.

Imagine you are the Democratic governor of a rural state that has struggled for decades to help provide healthcare services for all of its citizens.

This is the second part of a multi-part series on healthcare payment reform in Arkansas. Read Part I.

Out of your state's 2.9 million residents, a half million people lack health coverage.

With 100 percent financial support from the federal government, you can expand the state's Medicaid program and offer health insurance to 250,000 residents. Medicaid expansion would build on a high-risk gamble you had recently taken to create a value-based medical payment system across the state. It also would help address a $300 million Medicaid gap in the state's budget.

But almost every Republican in the state legislature views Medicaid as hopelessly broken. And you need 75 percent majorities in the GOP-controlled House and Senate to change the state's Medicaid program.

Now you know how Arkansas Gov. Mike Beebe felt heading into the legislature's key votes on Medicaid expansion in April 2013.

"The real issue was the 75 percent vote. That was the key to this whole problem," Beebe said in phone interview Tuesday, noting he had a powerful ally in his bid to expand Medicaid as part of a grand strategy to transform the financing of healthcare in Arkansas. "The logic dictates that you do it."

Medicaid expansion has become one of the fiercest fronts in the political battle over the federal Patient Protection and Affordable Care Act, with about half of the states having adopted Medicaid expansion. Many chose the relatively straightforward route through growth of existing Medicaid programs.

Christopher Cheney

Christopher Cheney is the senior finance editor at HealthLeaders Media.

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