For six months now, we've been working to improve Arkansas's health-care payment system. The current fee-for-service model is unsustainable, and we are facing shortfalls in our Medicaid budget that could soon lead us to slash services for thousands of Arkansans, unless we take action to reform the system. After six months of discussion with federal officials, doctors, insurance companies and providers, we have begun to narrow our focus on where to begin this unprecedented effort.
We've identified nine priority areas where Arkansas can find early success in moving from a fee-for-service structure to results-based, episodic-care payments. Those areas are pregnancy and neonatal care, ADHD, type 2 diabetes, back pain, cardiovascular disease, upper respiratory infections, developmental disabilities, long-term care, and preventive services.
This shift will be undertaken carefully, with a full-time project team in place to work with the public, advocates and providers. We will look to other programs around the country to find the ideas that work best and decide how they can be adapted to fit Arkansas's needs. We'll continue to study Arkansas data on claims and payments to ensure that any changes made are in the best interests of both patients and providers.
We've set a benchmark date of July 2012 to change the payment structure in these nine areas, but it could very well take longer. While we are very wary of the looming Medicaid budget shortfalls, we will take time to gather input and data and make sure this is done right.
Our initiative is unique. We are the first state to look at overhauling health-care payments. We have the opportunity to set the pace for improving care while lowering costs across the country. The U.S. Department of Health and Human Services has agreed to work with us in exploring these improvements, and I recently wrote another letter to HHS, asking for additional assistance from the Centers for Medicare and Medicaid Services in the coming months.
There are those still trying to confuse the issue and tie our efforts to last year's federal health-care-reform law for political reasons. As hard as they try, the truth remains that Arkansas's efforts are our own. We must find a better way to pay for health care in Arkansas, regardless of the legal fate of the Affordable Care Act. We are stepping forward to address the problem before we are faced with the unwelcome choice of raising taxes or slashing services.
Arkansas has a unique opportunity to be an incubator for sensible, system-wide improvements to our health-care system. We are a financially stable state, near the national median in both size and population. In recent years, the nation has admired the progress Arkansas has made in a number of important areas after long being ranked near the bottom. But health-care reform is an area where we have the opportunity to be in front from the outset. Our ability to care for the well-being of all of our people, while addressing a broken system, could set the standard for America to follow.