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Thursday, February 14, 2013

Republicans fight to preserve doctor pay

Posted By on Thu, Feb 14, 2013 at 6:57 AM

WHAT WILL DOCS DO? Cecile Bledsoe worries about their income.
  • WHAT WILL DOCS DO? Cecile Bledsoe worries about their income.
A most revealing episode at the legislature yesterday as discussed in an Arkansas Democrat-Gazette article this morning. (Pay wall.)

Republicans continued to express skepticism about the state Medicaid program's plan to shift to a reimbursement plan based on episodes of care and successful treatment, rather than a straight fee-for-services system. Two Republican doctors' wives in the state Senate, Cecile Bledsoe and Missy Irvin are not happy. The state might reduce costs — and effectively expand access to care — by steering business to physician assistants rather than doctors.

“If you have physicians out in the state who don’t want to do this, they’ll have nowhere to go,” said Cecile Bledsoe, R-Rogers, and chairman of the Senate Public Health, Welfare and Labor Committee. “I’m just not comfortable with that.”

THE ROYAL WE: Missy Irvin
  • THE ROYAL 'WE': Missy Irvin
And then there was Irvin, the senator from Mountain View whose air of entitlement has begun to rankle even some of her Republican colleagues.

“If every single payer is going to cut [doctors] to the bone when they could have just been a nurse practitioner, when they’re going to replace them all with nurse practitioners anyway, why would you go to medical school? Why go through all that training? And the patients at the end of the day, we suffer,” Irvin said.

"We" suffer. Somehow, I don't think that "royal we" refers only to patients.

Bottom line: These Republicans oppose this system — not to mention the expansion of Medicaid in general. They'd rather serve fewer people under a system that pays doctors more than serve more people in a system that might save Arkansas taxpayers money.

The same meeting including some beefing about the high cost of the expensive worldwide consulting firm, McKinsey and Co., in advising DHS on its restructuring. Approval of a new $12.4 million contract was delayed.

Heck, no problem for DHS there to win over Republicans. Just call in U.S. Rep. Tom Cotton to testify. He was a high-dollar McKinsey consultant in Washington until the Club for Growth dispatched him to hold down a 4th District seat in Congress until he could run for Senate next year. Surely he'll testify to the efficacy of spending millions with McKinsey.

I'd been looking into the McKinsey deal after hearing they'd had employees on the ground in Little Rock for months and also heard that Arkansas had emerged as one of the firm's biggest public clients. I was interested because a couple of my relatives have worked for McKinsey in years past and many Little Rock natives toil for them around the globe. The firm has earned its reputation, but it is not known as a low-cost operator.

That $12.4 million new contract is on top of $28 million paid McKinsey over two years from a variety of Arkansas sources. The state contends the money is paying for itself in savings. Here's what DHS spokeswoman Amy Webb told me when I inquired earlier:


In SFY12, the total federal, state, Arkansas Blue Cross and Blue Shield and QualChoice money put into the McKinsey contract was $13,170,000.00. In SFY13, the McKinsey contract is $15 million in federal and state funds (of which $11,870,000.00 has been expended). There is a pending contract amendment for an additional $12.4 million in state and federal funds. Right now, the federal/state breakdown is 50/50.

Though the contract outlines big expenditures, those are a relatively small investment in the future of a $5 billion program and far less than what we would pay a managed care company to run Medicaid on the state’s behalf. It is my understanding that a managed care company would charge about 5 percent of your overall program budget every year for as long as it was running the program. We believe the Arkansas Health Care Payment Improvement Initiative is a much better investment for the state, and the state money we will use in the first two years represents less than one half of 1 percent of the overall Medicaid budget.

It’s also important to note that Medicaid budget projections suggests the program already is saving the state money. The projected Medicaid budget deficit for SFY14 has dropped from $138 million to $61 million, and we believe the initiative is responsible for at least a portion of that change. Also, remember that we expect the savings from the changes we are implementing to be significantly more than our investment in the initiative. Moreover, we believe that a federal grant application we submitted to cover some of these expenses is very competitive, and there is a good chance we will receive those additional federal dollars.

The payment initiative will truly transform the health care system in Arkansas so we want to make sure that we get our approach right. McKinsey is recognized as a world leader in health issues, and has brought in expertise from around the world to work on our initiative. McKinsey staff is providing technical and analytical support for designing and developing episodes of care, patient centered medical homes and health homes. Among other things, McKinsey also is assisting in analyzing and designing organizational processes and needed infrastructure to support the initiative in the long-term.

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