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Arkansas Bets Farm on Value-Based Care

By Christopher Cheney  
   September 01, 2016

Baxter Regional Medical Center in Mountain Home, Arkansas, a not-for-profit 268-bed acute care hospital, also is facing financial cross-currents in the state's shift to value-based care, says Ivan Holleman, former vice president and chief financial officer, who retired in August 2016. "We have seen a significant shift from more profitable inpatient services to the outpatient setting. Despite substantial efforts and success in increasing our market share, we have seen a 10% decline in acute inpatient services over 2014."

Baxter Regional is pursuing several strategies to offset declining inpatient cases, he says. "We are working to maintain our financial position through market growth; ongoing efforts at efficiency; and, in partnership with our community physicians, establishment of a clinically integrated network and a Medicare Shared Savings accountable care organization. This organization is named Baxter Physician Partners or BPP, and we have partnered with North Arkansas Regional Medical Center in Harrison and their physicians to have the state's second-largest MSSP ACO as measured by benefit lives."

From 2013 to 2015, Medicaid expansion had a net positive financial impact at Baxter Regional, Holleman says. "The private option/Arkansas Works program has had a net financial favorable impact on BRMC of $3.3 million associated mainly in reduced costs from uncompensated care. It would have been difficult for us to maintain our financial position without this program."

Arkansas is blazing a trail for other rural states seeking to make the shift to value-based care, says ACHI Director Joseph Thompson, MD, MPH.

"From a timing perspective, our increases in efficiency and decreases in hospitalization coincide with our expansion of Medicaid under the Affordable Care Act. While we have reduced the cost associated with unnecessary hospitalizations, we have increased the number of hospitalizations through the private option. One of the reasons why the feds are interested in our model is that for the 30 states that have large, rural areas, this could be a way to introduce value-based payment without necessarily having complete ownership of a single network by a major health insurance plan," says Thompson.

Christopher Cheney is the senior clinical care​ editor at HealthLeaders.

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