Welcome to our latest edition of Arkansas.

A week before we begin a footnote.

Important one.

Only minutes after the program was recorded, state government announced it would ask the federal government to delay a directive that would essentially end expansion of the Medicaid program, known as our home.

The state is seeking a two year extension to give Arkansas policymakers time to craft an alternative.

With that important development, we begin.

Hello again, everyone, and thanks very much for joining us.

Call this our health care issue or one of them for the next hour.

Anyway, we'll try to shed some light on the clinical outlook for our state and outlook.

That seems cloudier, less certain with each passing day.

Hospitals threatened with closure and shedding employees, others joining forces to try to remain viable, and the delivery of medical services in rural Arkansas.

A question never completely answered.

We start with what presents as a major challenge to both public and private sectors.

To anyone remotely familiar with the health care landscape in Arkansas, it was a stunning announcement.

The Trump administration was refusing to permit Arkansas to continue to use money from the Affordable Care Act.

Obamacare, as it's sometimes still that it offered to buy private insurance for low income residents.

Those individuals who earn too much for traditional Medicaid coverage.

Couple that with the imminent imposition of a work requirement for Medicaid coverage, and the experts predict that as many as a quarter million Arkansans will lose their health care insurance.

For what that means for the rest of Arkansas.

And what might be done to mitigate any damage.

We're joined by Jodi and Tritt, executive vice president of the Arkansas Hospital Association, and by Ray Hanley.

He was the state Medicaid director for almost two decades before becoming CEO of the Arkansas Foundation for Medical Care.

Thanks to both of you for coming in.

Ray Hanley, let's start with you, because you were entitled to the long view.

Is there describe the situation.

Is it as grave as as some suggest?

Yes it is.

It is extremely grave.

You know, just to the long view.

You know, I spent a career working to expand coverage to people without it, with the help from a lot of people like Jodi.

And we were successful.

We expanded coverage to hundreds of thousands of people.

Our kids first pregnant women, the private option, even undocumented pregnant women.

Because coverage equals access to care.

And if you don't have access, people suffer and some of them die before their time.

And now we've got a confluence of events.

The big bad bill from last year, the budget bill that scored billions from taking people off Medicaid.

We've got the exchange people dropping their coverage out of the exchange because the premiums have skyrocketed because the subsidies are removed.

We have, a work requirement that is going to be extremely problematic.

And again, the long view, I can say that from heaven, administered the state's last attempt in 2018 when I was at the Arkansas Foundation for Medical Care.

It's going to be extremely hard.

The demographics of the population are hard to reach.

DHS and their distance.

This is a federal mandate.

I mean, I know the DHS director, who I guess is also the Medicaid director.

Whip smart.

She cares.

She'll try hard.

But it is going to be extremely difficult.

And a lot of people are going to lose coverage.

And then you've got the threat to the waiver that materialized last week that involves about 200,000 people.

And finding a way to keep that coverage.

It's going to be hard.

I think the most likely thing is it reverts to fee for service, which cuts the provider rates in half.

And then all this comes down to the impact on hospitals.

Hospitals are going to be badly hurt by this confluence of things here.

When all these people lose coverage, you don't not get sick or not get hurt if you don't have coverage.

And when they get sick or get hurt, they present to the E.R., perhaps admitted they can't pay the bills.

The hospital is stuck with more bad debt from people that used to be insured before all of these things came up.

And some of the hospitals, frankly, are not going to survive.

They just or not, even the big ones are going to be bleeding, red ink.

So the long view that would be made.

What you said a second ago, that coverage means access.

Coverage also means a certain fiscal, if not stability, at least some a level of compensation that providers, particularly hospitals, can rely on.

Absolutely.

Because the what we did, over a period of time, particularly with the private option, is created hundreds of thousands of people with coverage, with means to pay their providers, their doctors, their hospitals, their pharmacy, with the ability to get, timely preventative care.

And that's all lost if they lose coverage.

Yeah.

Mr.. I think the same thing.

And generally, I like to be very optimistic.

I think it's, quite wonderful to be able to represent the hospitals in our state.

There are about 118 of them.

I think most people believe that every hospital can deliver a baby.

And that's not true anymore.

We're down to 30 hospitals that have labor and delivery in the reimbursement system that we have right now.

As Mr.

Hanley said, when things start changing and you have a threat of 220, 230,000 Arkansans potentially losing coverage or having trouble administratively, reporting their work requirement or their volunteer activities.

The threat becomes on Arkansas hospitals.

And, you know, for years and years, we've had to use our reserves to sort of cover that bad debt and charity care, where to the point to where we don't have any more reserves.

Medicaid doesn't pay us actual cost.

Medicare pays us, it doesn't pay us actual cost.

And then we've got to somehow start talking about commercial reimbursement, because employers and people are having their premiums going up and up and up every year, and hospitals and doctors and nurses and other health care providers are not seeing a requisite increase in reimbursement that covers that cost of care.

So you've got a sector of fear going on in that space.

If you're not financially viable, you do things like cut labor and delivery.

You do things like only have a cardiologist in your hospital a couple of days a week, or, heaven forbid, once a month.

And I think we're going to see more and more of that if we don't really rein in the reimbursement mechanisms and improve them.

So the threats are imminent.

They're imminent for Arkansans.

And I agree with Mr.

Hanley that access to insurance means physical access to where you can physically get to your doctor or the hospital when you need to be there, and you have to be able to afford the premium.

One of the one of the key terms here would seem to be emergency room.

Yes.

I think everyone knows that all emergency departments take patients, regardless of their ability to pay.

We triage them.

Well, indeed, you can't refuse.

Correct.

Because that's right at the federal level tells us that.

And honestly, most of our hospitals are so mission driven, they wouldn't refuse anyway.

They're not picking who they treat.

They they treat the patient within the condition that they're in when they come to the emergency department, because that's their mission.

That's who they are in their hearts.

That's why they do the jobs that they do.

So I think we run a real risk of hospitals, and we've already seen it happen.

We have six hospitals now that are rural emergency hospitals, which means they are only an emergency room and outpatient services.

They gave up all of their inpatient services because they couldn't afford to leave their.

Mash units, on a. Mass.

So I like that.

Yeah, I got to write that down.

Right.

Mr.

Hanley.

I can't certainly disagree with, with with Jody.

And, and the question about the E.R.

is, is the bottom line issue.

People are going to get sick, they are going to get hurt, and they're going to present.

They can't get in to see a primary care physician or a specialist.

They're going to present to the E.R., because the E.R.

has to take them.

And even this doesn't matter.

They have to they're we're not going to let them die in the parking lot.

And sometimes they don't come to the E.R.

till they're really sick.

That's right.

And they're going to be more expensive to care for because they're going to be sicker.

They're going to be more likely to be admitted.

And then they have no means to pay the bill.

And depending on the injury, the illness, that bill could run into the tens, not hundreds of thousands of dollars.

And the hospital has to eat it.

And some of the hospitals in the state can't do that, anymore, because some of them are already at the breaking point.

We read about Camden and some others.

Yeah, they can't do it anymore.

Camden just laid off, I think, what, a substantial number of.

It's about 60, I think.

Yeah, but, but but this is this is true of larger hospitals as well.

We have hospitals in major cities that are Fort Smith, Fort Smith, and I think, am I correct, Washington County, I think, or Fayetteville, maybe.

I'm so also in Jacksonville.

That hospital was an acute care hospital, and now is a behavioral health hospital only, which means you don't have an emergency department there that can take care of your medical needs anymore.

And yes, we had a for profit group of hospitals in northwest Arkansas, that was purchased by a not for profit group in northwest Arkansas.

And we're super excited to welcome Freeman Health, to Arkansas.

And they've got experience in Missouri too.

And, you know, that brings up a really good point.

Arkansas is fortunate enough to have a great mix of types of hospitals.

We have rural emergency hospitals that I just talked about with no inpatient services, but do really well with outpatient and emergency departments.

We have small critical access hospitals that are paid a little bit differently.

But they don't have tons and tons of specialty services that people need.

And then you've got the acute care hospitals that you have, and all of those hospitals have different expenses.

I was with, Doctor Barnes at UAMs, earlier this week, and he said it takes $6.7 million a day to run UAMs a day.

You can scale those numbers down for other hospitals, but it's very expensive to run hospitals.

And the most expensive part is, is the professionals who care for you.

The heart and soul of hospitals are health care workers, the people who take care of you when you're sick.

And we know that as hospitals are facing financial distress, what they have to do is what Camden did.

You have to cut service lines and you have to lay off people.

And that's not good for the economy, and it's certainly not helping access.

No pun intended.

What's the prescription here if the waiver cannot is sustained and that cannot be reversed?

What what's the remedy or what would you recommend to the General Assembly and to the administration?

So I have already been speaking with members of the governor's staff and also legislators, especially legislators in leadership, to say, whatever you do, please keep people covered, because the entity who holds the bag when people don't have a coverage source is a hospital.

You just transfer the debt and the burden to the hospital because we have to take care of those folks anyway.

I have faith in Arkansans that they are going to stand up and say, we need help to keep our hospital.

We already have 27 hospitals throughout the state that have a local tax on them, just to help support them, because reimbursement is not keeping up with the expense of caring for patients.

It's my strong belief that Arkansas will find a way to keep those folks covered.

To Mister Hanley's point earlier, though, regardless of whether we keep them covered.

Right.

No matter if we keep them covered, more to say, they will be subject to a work requirement.

They will be subject, especially those who are kept on expansion to every six months having to prove that they're still eligible.

And that's dangerous.

Not because they're not eligible.

It's dangerous because they'll have to report what they're doing.

And if they don't report what they are doing and they still are eligible and they get sick, then folks go to the hospital and the emergency department has to absorb the cost.

And we are at a fever pitch where we no longer can afford to absorb those costs.

Well, those costs are in the tens of right handling, the tens of millions of dollars that would the the loss of those federal funds for, subsidies on the marketplace.

Enormous amount of money.

An enormous amount of money.

It not the state's money.

The feds have pulled it through the big bad bill that passed last year.

And when their premiums go from 300 to 900 or $1,200, families can't afford it, and they drop their coverage.

And then we're back to this cycle where when they're really sick, they go to the E.R.

and the E.R.

is, again, worth talking about because people don't understand how interwoven these hospitals are in the local economies.

They're often the biggest employer.

And if you lose your hospital, it's like losing your school.

You you lose your a lot of your ability to attract industry, people for want of access, for care.

If they've got to go 25 or 30 miles where they had a hospital before, some of them are going to die.

And the hospital is vital to these communities from an economic standpoint.

And I think that too often is lost on people that that don't make the the connection there.

To the argument and it will be made is that we simply cannot afford this, either at the federal level or at the state level.

I'm sorry if we're going to billions of dollars for tax breaks for, wealthy people, for, a war in Iraq that we probably didn't need.

I think we can figure out how to afford.

Well, the opposition, though, to be fair to the opposition, even at the earliest days of the Affordable Care Act, it was argued that this that the cost was simply unsustainable over the long term.

Sure.

The feds picked up most of it on the front end, and it began to the subsidies began to diminish, the federal share began to diminish.

And it was argued then we're looking at a doomsday sort of proposition here, fiscally speaking.

I think.

That's before the war.

I understand, but there is a there is a pretty high cost to people not having coverage, getting sick, wrecking the budgets in their local hospitals.

That inability to work because they can't get medical treatment.

There are costs to those things that impact tax revenues and other things as well.

So it's not a I'll one way or the other.

This pendulum moves both ways.

Yeah.

You are asking or potentially asking the lawmakers and the administration to sign or to to provide, I guess, hundreds of millions of dollars.

Absolutely.

And we can't afford not to.

And, you know, we we have a bit of a fairness issue with commercial payers in particular.

I know we're really focusing today on Medicaid and we haven't talked about Medicare very much, but in the commercial space, we really have a hard time with that too, because as Mr.

Hanley said, hospitals are employers.

We we have our own self-insured plans, so we know how insurance is working and when premiums are about the same in Texas, Oklahoma, Tennessee, Mississippi, Louisiana, Missouri and Arkansas, the reimbursement to providers is not an average stay in Texas providers.

The hospital there would get reimbursed about $17,000.

In Oklahoma, about $14,000.

In Mississippi, about 12.

In Arkansas, the average reimbursement for a hospital stay is $8,800.

And yet, our insurance premiums are about the same across all those states.

So we have to talk about commercial payers.

We've got to talk about Medicaid.

We have to keep people covered.

And I think hospitals are going to be open and willing to sit at the table with government, with the governor and her amazing staff, with legislators and their ability to really think creatively, to come up with a plan that CMS will approve, because no one wants those 200,000 Arkansans uncovered, and no one wants the cost shift, the cost of care for them when they need us in the hospital space or local providers to hospitals.

We can't afford that either.

Ray Handel, you dealt with the General Assembly for almost two decades on the matter of Medicaid and health care.

Expensive.

And it was it was easier than it is today.

I think, but it's it's Jodi and say it.

I don't think you have a choice.

I think, you can't not do it and have tens of thousands of people.

And you shared with the impact that has in the local communities.

And, you know, you mentioned Oklahoma, Mississippi, Texas.

You can look at Texas and Mississippi as an example of what happens if you don't have Medicaid expansion.

You know, the governor of Texas, the governor of Mississippi, refused to expand Medicaid because they didn't expand coverage.

In Texas, several hundred thousand people have no coverage.

They get sick.

They go to the ER, the hospitals, a lot of hospitals across Texas, particularly in northeast Texas, have closed in Mississippi, where the governor refuses to expand coverage.

Hospitals across the Delta have closed.

Specialists have left those that do OB and critical services when they don't have a pool of insured patients that that can pay for their services.

They pack up and they leave.

They go to somewhere where there are people that are insured, where they can make a living.

So Texas and Mississippi are what we don't want to be, and that's what we risk become.

And if we don't figure out how to keep all these people covered.

Well, there was one other bit of of it to say discouraging news in recent days.

And that is one of the two, one of the two major under the two one, we only had two underwriters, to cover the expansion.

Is leaving leaving behind only Blue Cross Blue Shield, which is going that's going to have an impact on, on, rights in the private sector likely or a guaranteed.

I think so, you know, in 2013, when then Governor Beebe and, Senator Jonathan dismaying and others in leadership, they weren't just solving for the hospital problem.

You'll remember in 2013, when we were having the discussion about whether to create the private option in the first place or whether to just expand Medicaid.

Hospitals were facing doom and gloom when it came to Medicare cuts.

We were going to get those Medicare cuts regardless, and the way to try to offset some of those losses by having those people, not be able to pay their own way.

Right.

Was to expand Medicaid and to cover another group of people that the federal government shares in the expense of, in the cost of.

Right.

And so back then, definitely legislators were trying to solve for hospitals.

You all are going to be cut with Medicare.

How can we help expand coverage to a different population, help offset those losses?

They were definitely solving for patients.

One thing we knew back in 2013 is that the fee for service Medicaid rates were so low, many physicians and nurses and other health care providers couldn't accept those patients on their patient panel because it didn't cover the cost of their care, and they've got it.

Those providers have to make a living.

The other thing that was brilliantly solved for with the private option was that premium level ization.

So the idea was if you we already had to have an insurance marketplace, it was also mandated in the Affordable Care Act.

So when that insurance marketplace existed, our folks were smart enough to say, okay, how can we stabilize that market and stabilize the employer insurance market?

Right.

Even the Arizona plans that are federally mandated and covered in those ways.

So when that happened, what they decided to do was basically buy the premiums to those for those insurance products, if you will, for the expanded Medicaid population.

And when you did that, even though I'm really fussy about how fast premiums have increased in Arkansas and how little providers are paid, I do fully recognize that the premiums likely didn't rise as fast because that insurance marketplace was more stable now.

Right handling.

If you go back to 2013 again, it was a it was a confluence of helpful events.

Jody and talks about the exchange and how the premium structure was already set out there.

And we took advantage of an expansion.

I mean, Andy Allison, who was the Medicaid director at the time, a the economist, smartest guy that ever had the job.

And I can say that been had it for 16 years, designed this, and it it worked.

And the fact that we were able to pass it was a miracle with the first Republican majority in 140 years before 2013, you had to go back to Civil War construction to find a Republican majority.

Max Brantley, who we both know, Scott Heastie, told me that you're wasting your time.

It can't be done.

It will never pass.

And lo and behold, with Jody and the team that we we put together and lobbied for, we passed it.

And the state has been immeasurably civil.

Yes, it has been immeasurably better off and blessed because we were able to get that done in 2013.

People have been able to access care.

They've been able to stay healthier.

They've been able to work, they've been able to take care of their families.

They've been able to pay their local hospitals.

So, it's one of the, most important things that I had ever been involved with.

And, I'm extremely proud of what we all did.

Then final, final question to end.

Mr.. And how many are so hospitals are on the edge, would you estimate.

Probably about 60%, 60, 60%?

There are all kinds of studies out there that want to, you know, give a list of which hospitals are at risk, etc.

and so forth.

But the truth is, hospitals are on razor thin margins.

Hospitals in Arkansas have been doing more with lists for far too long, and that's why we're at a fever pitch now.

That's why we've got to keep coverage for these Arkansans, and we've got to talk about Medicare to our federal delegation, and we have to talk about commercial payers and negotiate better to ensure that the premiums that we're all paying go to providers.

Well, let me just squeeze the time here, if I may, for one final question for both of you is at the core of this issue is that the whole American medical paradigm?

Let's try it.

You know, I don't really think so.

I think babies are born and we all live this one life.

And at the end of it, we are not here anymore.

Right?

And throughout that process, you need health care and you need hospitals to be the very best citizen you can be.

And we don't we can't afford not to make that investment in people.

We can't afford not to cover folks who don't have the means to be able to afford health care.

We've got to keep our providers healthy and and having a lifestyle to where they still can use their hearts of service to take care of other people.

Well, you know, I guess at the core of my question, anyway, it's frequently argued that we are the only developed country with a medical system that we have, and we spend more and get less health care for it.

Maybe.

But we also have amazing medical research, and people come here from other countries to get care.

And as long as you can see that happening, we know that we have the ability to do what's right, to take care of people.

We just have to be resourced in the appropriate way to do it and use our resources wisely.

Ray Handley, you get the last one.

I'm going to disagree a little bit.

I think part of the problem is the, the way the American health system works, we spend twice as much per capita is the rest of the industrialized world, but yet we leave at least 40 million people uninsured, many more underinsured.

Our lifespans are shorter.

Our health status is worse.

We pay the CEO of, United Health Care, for instance, probably $100 million a year for a for profit insurance system that doesn't work, doesn't exist in other countries.

So there are some problems with the US health care system that, contribute to this.

That should be addressed.

Sounds like another program in the making.

Mr.

Trent, Ray Handley, thank you very much for coming aboard and come back soon, Troy.

Thank you for having us.

And we'll be back in just a moment.

And we are back.

Hospitals laying off staff, big city hospitals, small town hospitals, consolidations and some partnerships.

One of the largest of the latter was announced short days ago.

An agreement linking the University of Arkansas for Medical Sciences with Pine Bluffs Jefferson Regional Medical Center, the largest health care institution in all of southeast Arkansas.

Joining us now, doctor C Lowery Barnes, Chancellor of U. A m s Doctor Barnes, select for making time.

Thanks for having me.

We're not related, by the way.

So there's no conflicts of interest here.

This this it's not really a merger, but it's a partnership.

Is that the proper word?

It is.

It's a legal maneuver of a member substitution into a nonprofit foundation that runs the hospital.

And so the board of trustees for the University of Arkansas will be that member of the hospital, and UAMs will will help run the hospital.

And there's it will accomplish what?

We'll hopefully we're going to increase the number of specialty specialists in the area and, and provide the hospital some stability.

They they've done a great job.

Brian Thomas, the CEO and his group working with their board of trustees, have run a very efficient operation for for their community.

And hopefully this will give us an opportunity to grow on that and expand some of the services that are offered.

Well, every hospital I would venture, even including UAMs for all its size, is feeling financial stress.

We have certainly felt our share.

Well, and it wasn't that long ago that UAMs was in the hole.

Big time.

We lost of well over $100 million in three years, so you can't continue business that way for very long.

Well, now we're on the edge, and I want to get back to this merger of M&A, if you want to call it that, in a moment.

But you're about to face another possibly enormous challenge.

And that's the end of the Medicaid expansion in Arkansas.

No doubt about it.

One of many challenges we face now.

So we're sort of how do we deal with a population of patients that certainly need medical care, that are that have had an opportunity to do that through our home and other programs, through Medicaid that are now challenged?

And if that pay source becomes too challenged, and we have too many patients who can no longer be in the Medicaid population, then we look at our self-pay portion of our business, which is often oftentimes mean no means no pay or very little pay.

That percentage climbs, making it more difficult.

Your E.R.

is about to get busy.

One would suggest it's a busy RR.

It's already busy.

It's always busy, but it could get conceivably busier.

Much busier.

But so could Children's Hospital end Baptist Saint Vincent.

Every.

Day.

Will be busy.

You know, because they're not going to as the saying goes, they're not going to stop getting sick.

They're just going to wait longer to get care.

And they won't have access to primary care docs as easily, and therefore they'll show up in the emergency room.

You know what would be what is your counsel if you were asked by the General Assembly and the administration, if they haven't already?

Yeah, we're we're talking about what will make recommendations to them if they ask us and we think they will.

And it's a little too early for that.

We're actually met yesterday studying the issues and figuring out what we think is going to be the best thing for our state, because our recommendations will be what we think is best for the state, not what's just what's best for UAMs.

Well, you're a big part of what with your branches all over the state, you better post.

Yeah.

Yeah.

It's very important that we, you know, our mission is to improve the health of our state and not just through health care, but wellness.

And so we need to make sure that we have those programs across the state as well.

Here's another factor that you'll soon be confronting, if not already in that, well, in 27 next year, BlueCross BlueShield will have the field to itself.

Not that it necessarily wanted it right to itself.

Right there certainly.

A shrinkage of those of the insurance companies who are going to play in that market will make things a little more challenging, and we'll see how long BlueCross BlueShield stays in that, that part of the business.

Yeah.

Where is UAMs right now?

It's the state's premier teaching hospital.

And offer this wide range of clinical care as well.

Where are you fiscally now?

Well, we're we just finished in the black for the first time in a number of years.

So we made $18 million or so, which almost a $45 million improvement from last year.

We lost 30 plus.

So we've we've done better.

Unfortunately, that's not very far in the black for an institution our size.

It costs us $6.7 million a day to keep our doors open.

So our expenses are significant.

We're a big organization with 12,500 employees.

With that kind of stake and that kind of small margin.

You're still on kind of a knife's edge there, no doubt about financially.

Every decision we make when we have to think about how it's going to impact our financial situation, our days cash on hand and our employees and how we can reinvest in our employees, our employees, our most important asset.

And we are behind trying to pay folks what they're worth for what they do.

And so we have we have to make improvements in that area, which means we have to increase our margins.

It's worth asking how how do you how do you improve that margin?

How did you do the turnaround?

Well, we increased our volumes.

We were Michelle Krauss, our CEO, and her team did a great job getting more patients in our hospital in the past year.

Last the year before, we had, accepted 2600 patients in transfer from other hospitals by increasing efficiency and opening of some more beds, we were able to increase that number to almost 4200.

So a significant increase from 2600 to 4200 from patients that are transferred to our facility from around the state.

Unfortunately, there's still a few thousand more that would have liked to have come, but there's no room at the end.

So we know we need to expand.

The Pine Bluff relationship helps us there.

We can use some of those beds to offload capacity, transferring patients there from southeast Arkansas and other areas of our state.

They can get treated there.

We also are opening a new hospital in Bryant that'll give us 53 more beds.

It will work as a community hospital, but those patients from Texarkana to there in the corridor who can be treated there, we can transfer the patients to that hospital instead of UAMs proper.

The economics of health care.

There's really no or no option other than what you're doing now.

It's all you can do.

You can manage your cost and grow your business well.

And by expanding, going out into the state and establishing these relationships in a more formal way with small.

Absolutely.

We've done it with Helena, we've done it with Mina, and we'll do it some more, because it's important that we help support those those institutions and that they help us.

And the big decision this past several days ago anyway, and that was for UAMs to acquire the Proton Center for a lot of people don't know what the Proton Center is until you can start there.

And why was it important to keep it?

Sure.

I can tell you, before I took over this role, I didn't know what the Proton Center really did either, but it is a very specialized form of radiation for cancer that treats very precise area.

So therefore less damage to surrounding tissue, very important for certain tumors, important for our pediatric patients who have brain tumor.

And some other tumors are folks who have your nose and throat cancer, women who have a certain, breast cancer that requires radiation, more so on the left breast because the is right behind the left breast.

And so you protect the heart.

And so there are a number of cancers that respond very well to it.

We were in a joint venture on 20% of the venture, but it was on our campus, our employees, our doctors.

So we were owed rent as well as reimbursement for our employees and our docs.

And the joint venture wasn't doing well and couldn't couldn't make those payments to us.

So we were a few million behind in what was owed to us.

The joint venture was going to have a difficult time making bond payments.

So we we worked with the bondholders to to purchase the center outright.

We think by doing so we can we can turn it around financially.

It's never going to be a big moneymaker.

We need it to break even so we can take care of Arkansans.

And by decreasing, decreasing the amount of debt on the center and by managing the overhead in a manner that we did, a lot of the things that were being referred out to be done by the joint venture we do every day.

We do revenue, revenue cycle, billing and collecting.

We do the accounting, things like that, that we do routinely where we're having to be sent out.

We'll no longer need to have a management contract because we'll just manage it ourself.

So we'll decrease expenses as well.

In this job.

You're what, several months into this.

Job I am.

But you also know your colleagues know and people who know you well you you no pun intended.

You made your bones in the operating room as an orthopedic surgeon.

No doubt.

About it.

And and you are said to be still fond of the.

Oh, I mean, you're your surgeon, after all.

I am operating today.

How much time are you spending?

How do you see the time in the O.R.

diminishing now?

Simply because you have to tend to the other stuff?

No doubt about it.

When I took over and came and became in this role as interim, I cut back my surgical schedule.

I did.

I was a hip and knee surgeon.

Now I just do knees.

I, I do a few knees on Tuesday morning, a few on Thursday morning and did clinic on Friday on Wednesday mornings.

So it's a it's a great mix.

It keeps me attuned to what I have been doing.

And it tells all the other folks who are doing clinical care that I'm still doing what they're doing to.

Yeah, you understand.

I do.

I get the challenges.

Look down the road if you would.

Doctor Barnes, where's health care in America?

I had a out of it.

Well, I guess what specific breaks Arkansas.

You.

You know, I keep saying the pendulum has to swing.

It can't stay over here forever.

America is not going to let all of its hospitals close.

There will be enough push back from the voters to help fix health care.

So hospital stay open, doctor stay in business, and we provide the care that needs to be provided.

The question is how long before the pendulum starts swinging back?

A president of the only one from Arkansas.

I offered a quotation once about health care that struck me.

He said, America plainly has the best health care in the world, that it has the best health care system is demonstrably false.

You agree with.

That?

There's a lot of truth to that.

And, you know, it's, I'd say most most patients really like their doctor.

They don't like the hassles that go through, have to go through to see their doctor sometime.

And we can certainly do a lot better in health and well-being.

And in contradistinction to health care, the more the better we do at keeping patients people healthy, the less likely they are to become patients.

I've got to leave it there.

Doctor.

Lowry Barnes, Chancellor UAMs, thanks for your time.

Thanks so much.

Come back soon.

Like to.

And we'll be right back.

And we are back.

It would appear that the Medicaid expansion, or perhaps its end, will pose significant challenges for state governments.

So to the continuing difficulty in delivering health care services, how amid the economic turbulence, will government respond?

Some perspectives now from two Arkansas legislators.

Representative Lee Johnson, doctor Lee Johnson, Republican of Greenwood.

And Representative Ashley Hudson, Democrat of Little Rock, who chose law school, though her practice includes health care matters.

Doctor Johnson, representative Johnson, let's begin with you.

Is the situation is it as grave is our grim, in your estimation, as the headlines would suggest?

Well, I think I think it depends on what you what?

Your labeling is grim.

I think the situation with the Medicaid expansion population, is going to be okay.

We're not going to abandon, 200,000 Arkansans to no health insurance.

You know, we're going to figure out a way to provide them Medicaid.

That's what I believe we're going to try to do.

It's just going to be in a different way than we've been doing.

And now, you know, the situation with hospitals in Arkansas.

Certainly rural health care in Arkansas.

You know, there are financial stresses, across the board on all of our hospitals.

So that situation, if that's the situation we're referring to.

Yeah.

It's a hard time right now in health care financially, but specifically with Medicaid expansion.

I think that's something we're going to get figured out.

Well, you mentioned a different way, sir.

That's got to be a pretty big, different way.

Excuse me a pretty big, different way, does it not?

We're talking about tens, hundreds of I think it.

I don't know that that's exactly the case.

You know what we've done for, since the beginning of the expansion in Arkansas, what we call the private option.

We're, I think the last state to have the private option.

Recently Centene pulled out of that marketplace.

You know, I think there was evidence, around us that that option was at some point going to play out and need to be revisited.

You know, there are plenty of states in the country that have done Medicaid expansion different than the private option, and still adequately provided, you know, care for the citizens of their states.

And, certainly that's something we're going to have to look at.

We're going to have to consider, you know, how do we provide, if, you know, if we continue with the Medicaid expansion, which I believe will how do we provide care for that population now that we're going to be moving away from the private option?

But you seem kind of optimistic about continuing the Medicaid option.

Or am I misreading you?

I think I'm optimistic about continuing Medicaid expansion.

But the private option where we're purchasing, you know, private insurance on the marketplace and paying those premiums, I think that's what's going to go away.

You know, when you look at what we do, what other states do with the Medicaid expansion population?

Some people have them in fee for service Medicaid.

Some people have them in managed care.

There are other states that have some hybrid models.

So, you know, we're going to have to look at how we provide care for that expansion population.

And I think we'll figure out a way to do that.

Miss Hudson, your colleague see some light at the end of the tunnel there?

You.

Eight.

So, yes and no.

I mean, I think that two things can be true at the same time, right?

I think that there is reason and a desire to be optimistic about figuring out some way forward with Medicaid expansion, while at the same time not downplaying the significance and the seriousness of what's happening right now.

It is extremely unusual for the federal government to, decline to renew a medicaid expansion program like they just did with Arkansas.

And, of course, we don't have information yet specifically about why they declined to renew it, although we know it has something to do with budget neutrality.

But, you know, from that perspective, we don't know the underlying causes.

Was there some issue with the way Arkansas presented our our our expansion plan?

Was there some issue with with waste or abuse within our own, you know, administration of the system?

We don't know that.

And so we need that critical information to understand better why the federal government did what it did.

But the reality is, unfortunately, that even though Arkansas was really a pioneer in the idea of this private option, when this first happened in 2013, many of my colleagues have campaigned against Medicaid expansion for their entire political careers.

And so I think it's difficult for me to say with 100% certainty that what we will see on the other end of this discussion is going to be Medicaid expansion in the way that we're familiar with it.

I agree with Doctor Johnson that we're likely not to have, the private option as it, as it stands today and that we're likely to move into either traditional Medicaid fee for service or managed care.

But, you know, remember within those parameters, there's there's a lot of room, for redefining what that looks like.

And as always, the devil's in the details.

We also have coming into play a work requirement, which is and together that and the loss of of the subsidies.

If that continues, it's not a sustain.

Doctor Johnson well yeah I mean you go to you we're we're talking in the neighborhood.

The projections are as many as a quarter of a million Arkansans could lose coverage.

Well, I think the only way they lose coverage is if we don't continue with Medicaid expansion.

And I'm sure there will be conversations around that.

I mean, certainly, virtually.

This is correct.

I mean, there have been, people that have been opposed to Medicaid expansion from the outset that, my my sense is, is that we will continue with Medicaid expansion.

It just will be in a different format than it's been to date.

And if we do that, then those two and 50,000 people that you're referencing, they won't lose health care.

Now, with regard to the work requirement, you know, we're going to have to, if, you know, we're going to have to come up with a different proposal.

I suspect will have some of the similar work reforms in there to this point.

You know, we don't have the details yet of exactly why, the waiver was or is going to be defined, but I don't think it's going to be around the work requirement.

Right.

And so if, if it's, if it's around the private option and budget neutrality, which is what I suspect, then, you know, until we see what the new waiver approach looks like, I don't know that we're going to, you know, know exactly what those you know, what what the downstream effects going to be.

I feel like it's going to be, you know, there's an opportunity to make this all, an improvement.

Right.

I think there's a world in which, depending on which, structure we go to, we have an opportunity to create some value based incentives around patient care and patient portability care.

So, it'll be interesting to see how that plays out.

Well, Miss Hudson.

Yeah.

You know, I you know, I agree with, with Doctor Johnson about the idea that that we could come out with a better product.

Sure.

And I hope we do.

We need it to work because we need our health care system to function.

The problem that we've been seeing, you know, over the past year or so is that health care systems don't do well with uncertainty.

And what this does is create another level of uncertainty on top of some of the uncertainty that you mentioned previously.

The increase in insurance premiums, the addition of work requirements, a lot of changes at the federal level.

All of those things trickled down at the Arkansas level.

And we see the things that we've been seeing over the past year maternity wards closing, rural hospitals, sounding the alarm about their fiscal distress.

Centene pulling out of the marketplace.

All of these things have been this this drip, drip, drip.

And now we come to a point where Medicaid expansion has been.

Our plan has been rejected.

So what we need to do and what we what we need to do, not just, you know, for for the Medicaid beneficiaries, but really for our health care system as a whole is to create some sort of certainty in the system that reassures the beneficiaries, the hospitals, the providers, the clinics, everyone within that ecosystem that we're going to be able to find a way forward to care for these individuals who need Medicaid expansion, and also to ensure that the providers who are providing that care are compensated in a way so that they're not left holding the bag with uncompensated care.

Which is what happens when you have a bunch of people show up to the hospital who don't have any health insurance.

Let's pick it up from there.

Because you talked about, well, uncompensated care, not, excuse me.

The issues, not only uncompensated care, but also Medicaid reimbursement rates to providers, which are.

Correct me if I'm wrong, either of you, but I think they are among the lowest, if not the lowest in the country.

And that continues to be a a real complaint, a concern on the part of providers.

Doctor or Miss Hudson?

No, absolutely.

I you know, you're 100% right.

Our our reimbursement rates even, you know, assuming the fact that Arkansas is a lower cost of living state are very low, and especially when you're talking about hospital reimbursement rates overall, especially our rural hospitals, they're already on razor thin budgets, right.

So every time we talk about a, an unnaturally depressed reimbursement rate or uncompensated care increasing over what they've seen since Medicaid expansion came online in 2013, that creates more and more risk that we're going to lose more of our rural hospitals.

So when we look forward to whatever our system is going to look like on the other side of this, we need to ensure that we're not leaving our providers in a situation where we create a system that doesn't incentivize providing care, to our Medicaid expansion population, because the rates are so unnaturally low and doesn't create a system in which the rates are so low that we still run into the same situations that we're running into where hospitals are closing, maternity wards are closing, and we have longer wait times for patients, women who are traveling sometimes an hour or two away to get maternity care.

And, you know, small communities losing one of the largest employers in their area.

Doctor Johnson or Representative John, you're a lawmaker.

You're also a provider.

Sure, sure.

Yeah.

And, you know, I think, you can't have a conversation with about compensation without talking about commercial rights as well.

Right?

Commercial reimbursement rates in Arkansas are also, ranked among the lowest in the country.

And so it's not just about Medicaid reimbursement, Medicare reimbursement, commercial payers.

All the reimbursement rates are lower across the board in Arkansas.

But when we think about, reimbursement for providers, I think one of the things we need to start talking about and we are is, is how do we incentivize quality of care?

Right.

This is not just about incentivizing, individual patient encounters, but how do we incentivize, providers, to provide quality care?

And then in addition to quality care, preventative care, you know, how do we get out in front of some of these chronic disease, issues and start, creating reimbursement models that, that incentivize prevention in addition to acute care management?

And so, you know, I think with this change that we're going to see with the Medicaid expansion, this is an opportunity to kind of redefine how we approach that, regardless of whether we take the approach of going into fee for service or going into managed care with that population, there really is opportunity in that to sort of look at how we're providing care for Arkansans and start emphasizing, to some degree, some quality, over just, individuals, you know, visits and occurrences.

What quality care and certainly preventative care, which you just mentioned would seem to be in jeopardy unless this fiscal situation is straightened out and pretty quickly.

Would you agree?

I'm trying to understand what I mean from a fiscal perspective.

You know, we're going to the, you know, the costs that we have currently to pay for the Medicaid expansion on the private option.

You know, the idea of budget neutrality is what's driving this issue.

We're going to continue to have some, consistent budget, neutrality across the across the board, whether we're paying for the private option or medic managed care or fee for service.

You know, we're going to figure out how to solve that fiscal problem.

I'm, I'm less concerned about that, from the standpoint of how we address that, currently from whatever then moving forward from what we've been doing.

Current state.

Yeah.

That's that's.

Yeah.

You know, I, I as I said before, I do agree with, with, Doctor Johnson that there are reasons to be optimistic and, and an opportunity to look at improving access to preventative care, incentivizing, more visits for preventative care.

And I and I think that those are all very good things.

One concern I have, though, as we look at the costs, as you mentioned, especially when we're talking about budget neutrality, are some of the costs that we are likely to have to start adding to our system?

Because of the work requirements, there is a cost with tracking work requirements for beneficiaries.

And we know that because Arkansas has already done this, there's a significant cost with trying to set up these systems.

You have to staff these systems to follow people for the work requirements.

And of course, you've got to get some sort of feedback from the beneficiaries on whether or not they're complying with work requirements.

Now, what we saw when we we did this previously, when Arkansas briefly had a work requirement, is that people who were didn't have access to their internet.

Servers were disproportionately kicked off, Medicaid and Medicare expansion due to the fact that they couldn't report on their work requirements.

And so we're going to have to come up with systems that provide both, you know, a low tech and a high tech way to report on, compliance with the work requirement.

And that's going to take an increase in administrative costs on that side.

So even when, as we're talking about budget neutrality, some of these additional requirements that the federal government is putting on us are going to necessarily increase our administrative costs.

Well, budget neutrality at a time of inflation seems okay.

This is, quite a bridge to jump across.

But let me ask both.

Both of you are intimately involved in this issue.

At the legislative level, have you had any contact with the, with the Sanders administration about its intentions for January on this issue?

I will defer to Doctor Johnson, but.

I mean, I haven't had any direct contact with the governor.

I mean, you know, I'm having conversations with, my colleagues about this issue and also, you know, with stakeholders around the the state, both in the provider, in the payer space, trying to understand, all sides of the pros and cons of where we might go.

And so, but but no conversations directly.

But, you know, I'm confident that we're going to work together to come up with a, a quality solution.

You know, when it comes to the work requirement, I mean, it's hard for me to see the economic downside of getting Arkansans back to work.

You know, putting people back in the workplace, provides upside across the board when we talk about economic development.

And we need, we need every able bodied Arkansan.

They can work.

We want them in that workspace.

And we need that from the standpoint of health care as well.

Got to end it there because we are simply out of time.

Mr.

Johnson, Mrs.

Hudson, thank you both very much for for coming aboard and come back again soon, please.

And that does it for us for this edition.

As always, we thank you for watching and see you next time.