Transformation Of Arkansas' Health Care System

In a little over four months major provisions of the Patient Protection and Affordable Care Act (PPACA) will go into effect. Beginning Jan. 1, 2014, the more than 500,000 working-age Arkansans currently without a source for paying medical expenses will be able to take advantage of the core intent of the federal law.

As discussed throughout this supplement and detailed in the associated charts, there are many implications for individuals and businesses as this day approaches.

There are far-reaching implications for the state too, including our ability to provide service to a significant influx of newly insured and the cost of expansion. Unlike many other states, Arkansas began a comprehensive evaluation of our health care system’s needs even before the PPACA was signed into federal law. Importantly, consideration was given to how we could maximize integration of the PPACA into a much-needed plan to restructure a struggling system to better meet the needs of Arkansans. Thanks to many months of work on the part of providers, payers, consumers, educators and policymakers from both the public and private sectors, some innovative solutions have been designed and are approaching full implementation.

Solutions are focused on improving quality, access and cost, with programs spanning strategic planning for our health workforce, accelerating use of health information technology, expanding health coverage and moving from a fee-for-service-based provider payment system to one that promotes better coordination of care, quality outcomes and cost containment. Following is an update on the transformation of Arkansas’ health care system.

Health Workforce

Do we have enough care providers for all parts of the state? Will we have enough to meet future demand? Can Medicare and Medicaid patients get the care they need? A strategic plan for addressing these issues was undertaken by representatives from numerous entities throughout the state. In April 2012, Arkansas Health Workforce Strategic Plan: A Roadmap to Change was released, containing more than 50 recommendations related to four overarching goals. At the heart of these recommendations was the development of team-based care through patient-centered medical homes. This led the way for Arkansas to be selected as a demonstration site for the Comprehensive Primary Care Initiative by the Centers for Medicaid and Medicare Innovation Center — 69 practices across the state are currently piloting a new way of delivering care centered around the patient.

A need for a more in-depth look at current and future supply and demand was indicated during the strategic planning process. In March 2013, Arkansas Health Care Workforce: A Guide for Policy Action was released. Findings in the report shed new light on a number of previous ideas and concerns. For example, much discussion has centered on the idea that we have a serious statewide shortage of doctors. Information in the report quantifies our statewide shortage but highlights a far greater problem — mal-distribution of providers with an excess supply in urban areas and critical shortages in rural areas. Both reports are available at

Expanding Health Care Coverage

The Health Independence Act of 2013, or “private option,” is a prime example of both innovation and working together across party lines. By expanding Medicaid eligibility, the PPACA offers an opportunity to provide health insurance coverage to about 250,000 extremely low-income Arkansans — roughly half of our state’s currently uninsured population. The private option is a first-of-its-kind program that will provide premium assistance to those eligible for the purchase of private plans through the Health Insurance Marketplace.

Doubling the size of the market not only attracted additional insurance plans but is expected to reduce overall premiums in the Marketplace. Beginning in 2015, the private option will allow Arkansas employers to avoid $25-$38 million in penalties annually for not providing coverage to low-income employees. Further it will save more than 1,000 lives per year, enhance economic development and create jobs. Financial barriers to health care services are most pronounced in rural parts of the state where the number of uninsured is the highest. More people with a payment source provides opportunities to stimulate business growth in health care services and support many rural communities.

Bending the Cost Curve

In July 2012, following 18 months of research, data analysis, public work group and town hall meetings, the first phase of the Arkansas Payment Improvement Initiative (APII) was launched. The APII shifts health care payment from fee-for-service that rewards volume of care to incentivizing effective care coordination, superior outcomes and cost containment. Originally undertaken by Medicaid to address rising costs and improve quality, the APII now has the strength of multiple payers including the state’s largest insurance carriers.

Spending in Arkansas’ Medicaid program remained almost flat in the last quarter of the same year the APII was launched, capping a year in which the expenditures grew at their slowest pace in three decades. For more information on APII visit

Health Information Technology

In 2009, Arkansas began planning a coordinated health information technology system including statewide adoption of electronic health records (EHR) and development of the

State Health Alliance for Records Exchange (SHARE). This system will help improve the quality of care as those providing medical services to patients will have secure, real-time access to patients’ health records from anywhere patients have been treated. The patient experience will be improved and costs will be controlled by avoiding duplicate testing and procedures. With more than 3,000 primary care providers and hospitals now committed to EHR adoption, we have exceeded our recruitment goal by nearly 50 percent. As of July 2013, five hospitals, 39 community health centers, nine behavioral health entities and 10 physician practices are using or implementing SHARE with almost 500,000 Arkansans benefiting from increased information for their clinicians. For more information visit and

The national gaze has been focused on Arkansas as we continue implementation of innovations that may serve as a model for other states wrestling with the need for system transformation.

While some providers and patients have already experienced the positive impact of our efforts and costs are beginning to show containment, full realization of a transformed health care system will take time.

There are bound to be some bumps along the way, especially as we launch the highly intricate new Health Insurance Marketplace. In the meantime, significant progress has been made in lockstep with increased health care coverage that will begin on Jan. 1.

We have stakeholders across the state committed to working together to complete the shared vision of a healthier and more productive Arkansas with a sustainable health care system that will truly meet the needs of our citizens.