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Arkansas Blue Cross and Blue Shield.

Setting The Direction For Managed Health Care In Arkansas

Arkansas' FirstSource, a statewide preferred provider organization (PPO), combines two of Arkansas' leading health care companies, USAble Corporation and Baptist Medical System, to reduce the cost of providing health care to Arkansans.

USAble Corporation is a subsidiary of Arkansas Blue Cross and Blue Shield. Founded in 1948, Arkansas Blue Cross is the largest health insurer in Arkansas, and a member of the Blue Cross and Blue Shield Association, an Association of Independent Blue Cross and Blue Shield Plans.

The driving force behind Arkansas' FirstSource is cost savings.

Arkansas' FirstSource will help control the rising cost of health care in Arkansas by operating as a preferred provider organization (PPO), a special network of cost-conscious hospitals and physicians working to contain the cost of group health care.

Arkansas' FirstSource is able to offer lower group rates because its hospitals and physician providers have agreed to provide services at lower rates in return for a larger volume of patients.

Robert L. Shoptaw, president and chief operating officer of Arkansas Blue Cross and Blue Shield, said "Arkansas' FirstSource brings together all who are involved in the health care process: Those who provide health care services - hospital and physicians; those who use them - the patients; those who pay for their services - employers; and those who administer health care programs - third-party payers like Blue Cross.

Currently, Arkansas' FirstSource consists of a network of providers spanning 37 counties throughout Arkansas who have joined with USAble Corporation to provide health care benefits to individuals covered by the PPO. Additional hospitals and physicians will be selected to participate within the Arkansas' FirstSource statewide network.

Individuals of groups electing Arkansas' FirstSource receive discounted fees when they use the hospitals and physicians who are a part of the PPO network. If the employer provides health benefits to its employees through Arkansas' FirstSource, the covered employees receive the cost savings by utilizing participating physicians or hospitals. Covered employees still have the option of using non-participating providers, but at a lower reimbursement rate.

Under Arkansas' FirstSource arrangement, there are three levels for participating hospitals: tertiary (highest) care, intermediate (regional) care, and primary (local) care.

The tertiary level of care will be provided by Baptist Medical Center in Little and Baptist Memorial Medical Center in North Little Rock.

"Rather than waiting for the government to find an answer or have national health care reform dictate a direction, this is an example of Arkansas companies working together in partnership to find a solution to the rising cost of health care," Shoptaw said.

Leading the way is not an unusual position for Arkansas Blue Cross, which holds an "A+" rating from Standard & Poor's Corp., a "B+" rating from A.M. Best Company, and has ranked in the top 10 percent of Blue Cross plans nationwide, over the past two years, in terms of financial reserves.

"On average, 90 cents of each premium dollar received is paid out in benefits for Arkansas Blue Cross policy holders, making our administrative costs, including salaries and overhead, the lowest, as a percentage of earned premiums income, of any Arkansas insurer," said Bob Cabe, senior vice president for External Services.

In addition, Arkansas Blue Cross was ranked in the top 10 percent in membership and claims processing and customer service performance among the 69 Blue Cross and Blue Shield plans in the national management information System (NMIS) report, first quarter 1993.

Arkansas Blue Cross and Blue Shield covers more than 23 percent of Arkansas' under-age-65 population and 30 percent of the state's over-65 population.
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Copyright 1993 Gale, Cengage Learning. All rights reserved.

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Publication:Arkansas Business
Article Type:Company Profile
Date:Aug 16, 1993
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