SEARCY—The White County Medical Center was the largest employer in a six-county area even before its recent merger with the Harris Medical Center to create Unity Health. Now the system has 2,200 employees and serves a population of about 250,000.

While the merger has helped achieve economies of scale for the non-profit health system that serves as a major economic engine for Northeast Arkansas, Unity Health President\CEO Ray Montgomery is very concerned about declining reimbursements combined with the potential loss of the state’s private option Medicaid expansion—a worry for hospitals all over the state. Declining reimbursements could result in $30 million in losses for Unity Health in the next six years.

Montgomery is serving on the Governor’s Advisory Council formed to help the state come up with strategies to provide healthcare to state residents while containing costs.

“We will use this Advisory Council to create ideas for the Governor’s Health Reform Task Force as a platform to publicize, explain and plead to political groups and communities to understand the importance of sustaining health insurance coverage for the people now covered under the private option Medicaid expansion,” Montgomery said. “Obamacare is extremely controversial in a conservative state like Arkansas. Arkansas is the only state in the nation to come up with the private option plan to cover the working poor and unemployed. Arkansas has had the greatest reduction in uninsured residents of any state. That is phenomenal. This has been a logical approach to address this problem, and we have to figure out a way to sustain it.”

Over 250,000 people have received health insurance through the state’s private option Medicaid expansion. Initially, the federal government is paying 100 percent of the cost, but after 2016, the state will have to start paying a share that will grow to ten percent by 2020. Some legislators have said the state can’t afford the cost sharing estimated at $200 million annually by 2020, and that it is important to contain growth in government and prevent residents from becoming too dependent on government programs. But Montgomery questions if it is the right thing to give 250,000 people health insurance and then put those people back out on the streets with no insurance so they go back visiting the emergency rooms for healthcare.

“This task force is tasked with figuring out solutions to the private option and Medicaid in general,” Montgomery said. “We are facing the reality that healthcare costs are increasing, and many state legislators elected in November campaigned on the pledge to repeal the Medicaid private option because their constituents don’t like Obamacare. Yet the Medicaid private option plan has been very successful. This is a partnership that works with private insurers to keep costs down.”

Studies by the Arkansas Hospital Association have found that hospitals have experienced a significant reduction in bad debt and charity care since the private option was instituted. Montgomery said part of those savings came from people being able to access primary care at a doctor’s office instead of going to the emergency room—the most expensive way to get healthcare.

Despite the challenges, Montgomery, a self-described eternal optimist, is confident about the unique ways the healthcare community is working to weather the storm.

“I have a lot of confidence in the leadership of this state to come up with solutions to problems for our communities to receive the care they need,” he said.

Arkansas has also seen success with a Medicaid payment initiative program that helped to reduce the growth of Medicaid spending from five to seven percent annually to only two percent in the past year or so.

“We call it bending the cost curve,” Montgomery said. “It is not reducing costs, but the growth is narrowing significantly. It is a very successful group of strategies.”

Healthcare is in the midst of a transformation that includes value-based purchasing putting a much greater emphasis on quality and incentivizing good results.

“We are seeing in healthcare a real emphasis on patient satisfaction and reducing re-admissions,” he said. “And instead of only thinking of hospitals as a place to care for sick people, hospitals can help reach out to get people to eat well, reduce stress, and exercise. Hospitals can provide important health education, as well as support for the emotional and spiritual health needed to achieve the highest level of wellbeing.”

Another strategy Unity Health is taking to deal with declines in reimbursements is to add services not previously available like an adolescent psychiatric program.

Physician shortages are a huge problem, and Montgomery is excited about a new residency program being established to help train physicians to practice in rural areas of the state. New osteopathic medical schools are being opened at Arkansas State University in Jonesboro and Fort Smith. The first class will begin in 2016 with 115 students at Jonesboro and 150 at Fort Smith.

“We have been approved for an internal medicine program of which we have capacity for ten residents per year for a three-year program,” Montgomery said. “That means once we ramp up, we will have 30 residents in internal medicine here at any one time. We have been approved for four residents in family medicine, so that is 12 once we ramp up. We also got approval for a psychiatric residency program that will begin in July. Since it is hard to recruit physicians from large urban areas to come to Arkansas, this is a successful strategy to grow our own because about 70 percent of residents who graduate stay within 50 miles of where they did their residency.”

They hope to attract specialists willing to teach.

“It is vital for our program to partner with specialists who would be willing to teach knowing they are positively impacting the future of healthcare,” Montgomery said.

A native of Kansas, Montgomery has been at the White County Medical Center for 26 years. He is married to Rebecca Montgomery, and the couple have three children and two grandchildren.

“This is a great community, a great place to live,” Montgomery said. “I’ve been blessed with talented people who make me look good.”