April 30, 2015

Modern Healthcare Article

A 25% uninsured rate won’t come back, University of Arkansas for Medical Sciences chancellor says

By Modern Healthcare | April 25, 2015

Since 2009, Dr. Dan Rahn has served as chancellor of the University of Arkansas for Medical Sciences, the state’s only comprehensive academic medical center. Rahn, a rheumatologist, previously served as president of the Medical College of Georgia and as director of the internal medicine faculty practice at Yale University School of Medicine. He is nationally recognized for his work on healthcare workforce shortages and has served on the board of the Association of Academic Health Centers. Modern Healthcare reporter Virgil Dickson spoke with Rahn about how Arkansas‘ Medicaid expansion has affected his center, the uncertain political prospects for preserving the expansion, and how his state is working to increase the number of primary-care physicians. This is an edited transcript.

Modern Healthcare: Were you surprised when the Arkansas Legislature agreed in 2013 to expand Medicaid to low-income adults?

Dr. Dan Rahn: Arkansas has a history of finding creative solutions that are in the best interest of the people here. It’s unique in the region in finding a path forward to expand Medicaid through the private-plan option approach. I was very pleased that happened.

MH: What are the challenges of running an academic medical center in a rural state with lots of low-income people?

Rahn: Patient-care revenue cross-subsidizes our missions in education and research. Prior to the Affordable Care Act insurance expansion, we were laboring with an uninsured population of about 14% of our patients, and that was making it extremely difficult to finance the entire operation. After the coverage expansion last year, we dropped to about 3% of our patients being uninsured. That has greatly improved the fiscal health of our system. Our medical center is generating about a 1% operating margin, which is razor thin but nonetheless is positive. Prior to that, we were operating in the red.

MH: How is the coverage expansion affecting your patient volumes?

Rahn: We have had about a 15% increase in our outpatient volume, about a 15% increase in our surgical cases, and around a 6% to 7% increase in our inpatient volume. This issue is often looked at through an economic lens. But there is a lot of human misery associated with lack of insurance. Now people are able to get needed care.

MH: What are you doing on increasing patient compliance with treatment and medications?

Rahn: We have been intensively focused on helping educate our patients so that they can be effective advocates and participants in their own care. We have also been very focused on a patient- and family-centered approach to care and redesigning our clinical processes around them. By doing those things, we find that patients are better able to participate in their own health.

MH: What can hospital leaders in non-expansion states do to persuade their legislators to approve Medicaid expansion?

Rahn: The best political strategy is to try to get agreement on what the goals are. If the goals are a healthier, more productive population with more years of quality life at lower cost, then we have got to have a plan and a vision of a system that can deliver that.

MH: Can those arguments overcome political partisanship?

Rahn: That’s a good question. Apparently, that has not held the day so far in other states. In Arkansas, size is an advantage. There are about 3 million people in Arkansas. People know each other and that really helps them understand the importance of healthcare access. Right now, the state’s plan is to continue the private-plan option model for the three-year CMS waiver period while engaging a legislative task force to potentially craft a different strategy when the waiver expires. But there is acknowledgement on the front end by all participants that the goal of compassionate access to healthcare is a good goal. I am optimistic that value will eventually prevail.

But the politics are pretty strong.
MH: But the new Republican governor and some new Republican legislators seem less interested in continuing the Medicaid expansion.

Rahn: This was an experiment when it got started. It has produced a lot of very good results. But the architects of the private-plan option model envisioned that it would be tweaked in the future. I believe that is what’s going to happen through this process. The plan is to look at the entire Medicaid program and craft a strategy that produces the best value. I am fortunate to be a participant in that process, so I don’t want to make predictions. But I will say that in the initial task force hearings there is a strong commitment to an evidence-driven process. I am a scientist, so I hope that will hold sway.

We have term limits, so there are a lot of legislators who are new. These issues are extremely complex, and there are a lot of different ideas. That’s why we have to rely on evidence driving the decisionmaking. But I am quite confident that just going back to a 25% uninsured rate is not going to happen.

MH: Does your organization have a contingency plan for what it will do if the U.S. Supreme Court strikes down premium subsidies?

Rahn: Our center is not mounting contingency plans. There is a strategy in Arkansas to convert from a federal-state partnership exchange to a fully state-run exchange. If the Supreme Court disallows the subsidies, the plan would be for the Legislature to come back into session and make a decision about what to do. The governor was firm in saying we cannot throw people into a state of chaos with regard to their healthcare.

MH: Do you see Medicaid expansion affecting healthcare workforce shortages?

Rahn: In Arkansas we have a primary-care shortage and a problem in distribution. Getting physicians and other health professionals into the rural areas is challenging. If the rate of uninsurance is as high as it was in some of our rural counties, then it is next to impossible to get professionals into those areas. So insurance expansion increases the likelihood of being able to attract physicians and other health professionals into underserved areas.

But we still have an absolute shortage.

MH: What is your organization doing to address the primary-care physician shortage?

Rahn: We have been engaged in an all-payer initiative to transform healthcare payment, and 80% of primary-care practices now have been converted to a patient-centered medical-home model. Each of those practices then qualifies for ongoing payments on a per-patient, per-month basis to engage proactively in preventive services and achieve population health goals. All of that makes primary care much more attractive.

In our residency match for our graduating medical school seniors this year, we saw a significant increase in the number of graduates going into primary-care careers. It’s key to transform the role of the primary-care physician to be the leader of a team that’s focused on meeting the health needs of a population more broadly. That makes it a much more exciting job.