Across the country, most states are making painful and life-altering decisions about how and where their budgets must be cut. When it comes to Medicaid services, these are especially tough choices to make, with millions of Americans in danger of losing access to care, and doctors and hospitals being paid less for treating the sick and injured.
In Arkansas, our conservative budgeting and measured fiscal approach has fended off a Medicaid crisis, so far. But despite all we've done to help our State through the Great Recession, a similar crisis could arrive on Arkansas's doorstep within a year.
Arkansas's population is growing, and it is aging. When combined with recent national economic woes, the result is that more Arkansans are becoming dependent on Medicaid-funded health care. In the fiscal year beginning in July 2012, Arkansas will be between $60 and $80 million short of the money needed to sustain Medicaid services. The year after that, the number jumps to about $250 million. Because the federal government matches our Medicaid revenue at an average rate of three to one, $1 billion in health-care funding for Arkansans is at risk. That's if we do nothing. Instead of waiting for that crisis to arrive, we've begun working now on changes to our Medicaid system that could make Arkansas a national leader in health care.
Federal health-care reform has created a lot of controversy and division in our country and in our State, and the fate of that law will likely be determined by the U.S. Supreme Court. Our efforts in Arkansas have nothing to do with that law. We must take action regardless of how those legal battles play out. In fact, I want to do in Arkansas what I felt the federal government should have done in the first place: get health-care costs under control.
The current health-care payment system in America emphasizes treatment over results. If you are a health-care provider, you are compensated based on the volume of tests, treatments and referrals you can administer. In Arkansas, we want to put greater emphasis on results, to base more payments on making patients better, not just treating them as much as possible.
It is early in this process, and we are going to talk to everyone involved. I recently met with U.S. Health and Human Services Secretary Kathleen Sebelius, because whatever steps we take must have federal approval. The health-care experts in my administration and I are meeting with providers, legislators and other officials to begin looking at the specific details of revamping an Arkansas system that will work for everyone in the State. I believe that if we work together, we can improve the quality of health care, ensure that providers are fairly compensated and save tax dollars.
If someone steps forward with an idea to help or take us in a different direction, we will listen. The only certainty is that we must do something constructive to take care of Arkansas's most vulnerable citizens. Taking no action will lead to either higher taxes or to cuts in care and lower reimbursement rates for hospitals, doctors, nursing homes, home-health programs and other health-care providers.
I've been saying for a few years now that Arkansas's actions during the worst economic upheaval in two generations would put us at the head of the pack as the nation recovers. By acting now, we can make Arkansas an example of what one state's initiative can do to improve health care and better position its people for the future.