Column: How to pay doctors?

My Arkansas News Bureau column this week discusses the Beebe administration’s Arkansas Health Transformation Initiative.

That’s a lofty-sounding title for a plan that is forming to remake Medicaid, the federal-state program that serves many lower-income Arkansans as well as Arkansans with disabilities and those in nursing homes. The initiative would “bundle” payments to groups of medical providers rather than paying each individual provider using the traditional fee-for-service method.

Why is that significant? Under fee-for-service, Medicaid keeps paying as long as doctors keep billing, so there is no incentive to cut costs. The goal is to provide that incentive before Medicaid starts running huge deficits soon.

Doctors would be paid a negotiated flat fee per episode as inducement to avoid duplicate and unnecessary care – much like you or I would pay for many other services we receive. Imagine telling a house painter that you’ll just pay him as long as he keeps painting. He might very well paint just enough to get the job done right. Or he might cover your house in layers of paint.

Lots of medical providers, of course, do not believe they should be paid like house painters, so it’s going to be a heckuva fight.

Here’s the column.

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