For many years, Americans have been burdened by rising health-care costs that, unfortunately, haven't always resulted in improved care. Last year alone, the average insurance deductible for an individual rose by nearly 9 percent. This has led to an increasingly unhealthy population and a fragmented system of care across the country. To curb this growth, Arkansas is changing the game with a new payment system aimed at lowering costs and improving the quality of care.
Work in Arkansas began two years ago, and implementation of the Arkansas Payment Improvement Initiative started last fall. The initiative rewards health-care providers who give patients high-quality care at an appropriate cost. Insurers pay for "episodes" of care rather than individual treatments "per procedure." This shift aims to reduce duplicative tests and procedures, saving money and patient discomfort. Other states are watching closely, as our work could soon be a model for other parts of the country. We are witnessing unprecedented cooperation between state and federal governments, private insurers like Blue Cross and Blue Shield and QualChoice, hospitals, doctors and other providers. And now, we can add corporate America to that list, as well.
This week, the Initiative got a major vote of confidence from Walmart, the world's largest retailer. The company committed $670,000 to help fund a statewide tracking system that will evaluate the impact and effectiveness of the project. With 58,000 Arkansas employees and a proven track record in innovation, the company may also have a unique perspective that will benefit the Initiative as it continues to evolve.
Currently, the Initiative is only in effect for five different health episodes. Five more will be added this spring, and an additional five this fall. Because the reforms we are making are complex, this measured implementation gives providers and patients a safety net if any unforeseen problems arise.
The long-term goal is to build a new and sustainable system that rewards good care outcomes for Arkansans through team-based approaches. When primary-care providers actively encourage patients to use preventive services, patients can better manage chronic diseases or avoid them all together. Serious illnesses and chronic disease lead to costly treatments, and these conditions can often be prevented. When people receive appropriate follow-up care after hospitalizations, the likelihood of hospital readmissions can be dramatically reduced, which also results in better health and lower costs.
All across the nation, Americans know that the health-care system we have had in place for many years is ever more costly and inefficient. We spend more money on health care than other countries, but too many of our people are in poorer health. Rather than waiting to see how national initiatives impact cost containment and quality of care, Arkansas will continue our tradition of taking action to care for our own. We are stepping up and trying something new for Arkansans that could someday help people across the country.