Arkansas - Digital Publishing
Arkansas - Digital Publishing
Arkansas - Digital Publishing
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how many of the estimated 500,000<br />
uninsured Arkansans will be covered<br />
come Jan. 1. Even if with insurance, it’s<br />
unknown if they will seek treatment at<br />
UAMS or go somewhere else for care, he<br />
said.<br />
One way UAMS is looking to cut<br />
expenses is by partnering.<br />
UAMS and St. Vincent announced in<br />
August that they had started talks to see<br />
if there was a way the state-owned UAMS<br />
Medical Center could work with Catholic<br />
Health Initiatives’ St. Vincent to improve<br />
health care while reducing costs.<br />
They hired consultants from Deloitte<br />
LLP of New York at a cost of at least $1<br />
million to examine areas where the two<br />
could partner.<br />
Peter Banko, the CEO of St. Vincent,<br />
told <strong>Arkansas</strong> Business recently that<br />
Deloitte’s study should be finished by<br />
the middle of February.<br />
Meanwhile, doctors from both hospitals<br />
are meeting to discuss areas where<br />
a partnership might be formed, Banko<br />
said. The hospitals agreed to an April 1<br />
deadline to decide if they want to move<br />
forward with partnership talks, he said.<br />
Financial Incentives<br />
Starting in October, health care providers<br />
could start seeing a financial<br />
reward for keeping a lid on health care<br />
costs.<br />
Under the <strong>Arkansas</strong> Payment Im-<br />
provement Initiative, health care providers<br />
who come in below the target price<br />
set by Medicaid and other payers for<br />
some episodes of care will get to share in<br />
the savings, said Rhonda Hill, director<br />
of health care finance at the <strong>Arkansas</strong><br />
Center for Health Improvement.<br />
The APII will look at the average price<br />
of care over a 12-month period to determine<br />
if the provider hit the goal. A provider<br />
that doesn’t could be on the hook<br />
for the difference, Hill said.<br />
For UAMS, however, hitting the targets<br />
could be a challenge, Rahn said.<br />
Not only does UAMS have a comprehensive,<br />
acute-care hospital, but it also<br />
teaches medical students, making the<br />
cost of care higher, Rahn said.<br />
“We just need to work through how<br />
we deal with that,” he said, adding that<br />
nothing has been settled.<br />
The <strong>Arkansas</strong> Department of Human<br />
Services still is developing its appeals<br />
process involving episodes of care,<br />
spokeswoman Amy Webb said.<br />
On the national scene, many UAMS<br />
revenue streams are at risk, according to<br />
its fiscal 2012 audit.<br />
One of the biggest potential blows to<br />
UAMS is the funding it receives from the<br />
National Institute of Health of Bethesda,<br />
Md., which accounted for $75 million in<br />
the fiscal year that ended June 30.<br />
“It could mean a loss of a percentage<br />
of that” as a result of the uncertainty surrounding<br />
the budget in Congress, Rahn<br />
said.<br />
The “sequester” cuts required by the<br />
Budget Control Act of 2011 were projected<br />
to cost UAMS $12 million a year,<br />
but the “fiscal cliff” deal in Congress left<br />
those reductions up in the air.<br />
Rahn said he isn’t sure what will happen<br />
to the NIH budget or the federal<br />
Medicare health insurance program for<br />
people 65 and older. But he doesn’t think<br />
the dollars will be going up.<br />
“We expect once a budget compromise<br />
is reached, it will involve reductions<br />
in spending,” Rahn said.<br />
State money, accounting for 9 percent<br />
of UAMS’ budget, also<br />
isn’t going as far. State<br />
funds increased slightly<br />
to $114.8 million in fiscal<br />
2012, but UAMS had<br />
to pay more out of that<br />
money for Medicaid<br />
Dan<br />
Rahn<br />
match payments. The<br />
amount paid for Medicaid<br />
match increased<br />
from $57.4 million in fiscal 2010 to $72.1<br />
million in fiscal 2012.<br />
“A portion of our [state] funds gets<br />
used for matching of federal dollars for<br />
uninsured in what is called disproportionate<br />
share payments,” Rahn said.<br />
Under the disproportionate share<br />
funding formula, <strong>Arkansas</strong>’ median<br />
household income is compared with<br />
the national median. Since the state<br />
has made progress toward reaching the<br />
national average, UAMS’ match climbed<br />
from 25 percent to 30 percent, Rahn said.<br />
“So as long as we maintain positive<br />
income growth in the state relative to<br />
the nation, we’re going to continue to<br />
see decrease in the federal match,” Rahn<br />
said.<br />
While economic development in the<br />
state is desirable, Rahn said, it takes a<br />
bite out of the campus’ revenue.<br />
“It’s just one more thing that we’re<br />
having to deal with,” he said.<br />
To offset the funding cuts, UAMS is<br />
looking for more sources of revenue.<br />
One is in cancer treatment. In June,<br />
it completed its $9.5 million purchase<br />
of nearly all assets that the Central<br />
<strong>Arkansas</strong> Radiation Therapy Institute<br />
used on UAMS’ campus. UAMS also<br />
terminated CARTI’s lease agreement on<br />
the campus. In July, UAMS opened the<br />
UAMS Radiation Oncology Center, and<br />
that’s expected to generate $10 million<br />
in net patient service revenue in the current<br />
fiscal year.<br />
Setting up its treatment center required<br />
UAMS to buy two main pieces of<br />
equipment for $7 million, but the center<br />
should be profitable in the current fiscal<br />
year, he said.<br />
Another revenue source will come<br />
from dental services. At the end of the<br />
month, UAMS will open the UAMS Oral<br />
Health Clinic. The center is working<br />
toward accreditation for postgraduate<br />
residency programs in advanced general<br />
dentistry and oral surgery.<br />
The program seeks to have students<br />
in dental schools outside of <strong>Arkansas</strong><br />
provide care in the clinic by next year.<br />
A full dental school at UAMS still is<br />
about eight to 10 years away, Rahn said.<br />
That is, of course, if the money is<br />
available for the project, he said. n<br />
UAMS<br />
<strong>Arkansas</strong> Business January 28, 2013 13<br />
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