Central Health places tax increase on ballot

Funds would help improve local medical care

This November, Travis County voters will decide whether to support a large tax increase for their health care district.

At its Aug. 15 meeting, the Central Health board of managers unanimously voted to place a proposition on the ballot asking voters to raise the tax rate by 5 cents.

That would take the 2013 tax rate from 7.8946 cents to 12.9 cents per $100 of valuation. If voters approved the proposition, it would mean a $107.29 property tax increase for a taxpayer with an average homestead assessed at $214,567.

Central Health officials said they are asking for the money in order to afford projects that could be assisted by federal funds.

These funds would come from the 1115 Medicaid Waiver, which is intended to encourage the creation of new projects to improve how health care is delivered locally while still reimbursing hospitals for treating low-income patients. As part of the waiver, the federal government will match $1.46 for every dollar that is locally generated.

Central Health said approving the tax increase would produce $200 million more over the life of the waiver than if the health care district simply adopted smaller increases during that same time.

Prior to the meeting, state Sen. Kirk Watson, D-District 14, and representatives from Austin’s business, education and health care communities held a news conference calling on Central Health to place the tax increase on the ballot.

Watson tied the tax increase to regional health care improvements such as the new teaching hospital that Seton Healthcare Family plans to build to replace University Medical Center Brackenridge.

Central Health officials have said waiver money cannot go toward the construction of a new separate medical school but will likely fund services there.

At the meeting, the managers praised the waiver as a unique opportunity to better serve the entire community, especially the uninsured, low-income residents and those with chronic conditions.

“We cannot [make reforms] without the community’s help. The time is now. We will not be given this opportunity [the 1115 Waiver] again,” Central Health Chairwoman Rosie Mendoza said.

“This is not a vote for a teaching hospital. This is not a vote for a medical school. This is simply a vote to put the tax increase for voters to decide,” Central Health Vice Chairman Frank Rodriguez said.

Waiver 101

During the 2011 legislative session, Texas officials decided to expand Medicaid managed care and use HMOs to coordinate care for the poor, said Sarah Cook, Central Health director of business development.

However, doing so would have stopped Texas hospitals from receiving supplemental federal funds to help pay for treating Medicaid patients.

Texas applied for and received approval for the five-year waiver, which allows hospitals to still receive supplemental funding in the short term but move toward improving health care through new programs. Central Health is in the first year of the waiver with major changes expected in years two through five. The waiver is unrelated to the Affordable Care Act.

A simple way of thinking of the waiver is that one stream of federal government money is being split into two buckets, said Jeff Knodel, Central Health director of regional health care partnership.

The first bucket is a revised version of the same supplemental federal funds hospitals already receive and is now called the Uncompensated Care pool of money.

So-called “charity care” is a significant percentage of a hospital’s activities. Seton Healthcare Family spent $193 million on it in 2011, said Greg Hartman, CEO of Seton Medical Center Austin and University Medical Center Brackenridge.

John Stephens, Central Health chief financial officer, said that emergency rooms are getting overused for nonemergencies.

“We need to get people out of the ER. Otherwise, we are paying more than we need and having people wait longer than they need. We need people to get the right care at the right time and place,” he said.

Hartman said follow-up care to treat chronic illnesses was also costly.

The second bucket, called the Delivery System Reform Incentive Payments, has the funds that Central Health will use to improve how it delivers care.

“What we cannot forget is that [the waiver’s] full name is the Texas Healthcare Transformation and Quality Improvement Program,” Cook said. “We are supposed to do bold things with these funds. [Officials] do not want to see the same old projects.”

Earlier this summer, health care providers submitted draft programs to Central Health. Central Health helped shape the projects and evaluated them based on need, feasibility and admissibility, Cook said.

Central Health is expected to send a formal project plan to the state in September and federal government before Oct. 31.

Once the plan is approved, Central Health will send local tax dollars to the state to participate in the match. The health care providers will begin the programs. The providers meet predetermined performance targets and then receive the matched funds.

Reactions

At the meeting, public comment was divided between speakers who supported the increase and those who criticized it as overtaxation and not serving the people Central Health aims to help.

The district had received eight resolutions from groups supporting the increase, including the Austin Chamber of Commerce, the Downtown Austin Alliance and The University of Texas Alumni Association.

Former Austin City Council candidate Laura Pressley said the ballot proposition represents an almost 70 percent tax increase and that support of a medical school does not fall under Central Health’s mission.

Resident Richard Franklin said that residents cannot afford to pay for Central Health’s growth.

“Please help us and find other ways to pay for this. We need services, not a medical school. The people in the community will not be getting those jobs,” he said.

Draft projects in the 1115 Waiver

One of the goals of the 1115 Waiver is to create new programs to improve local health care. Travis County’s health care district, Central Health, collected draft project proposals from the six counties that comprise the Region 7 Regional Healthcare Partnership.

Some draft projects in Travis County:

• Create therapeutic counseling centers for students on Austin ISD campuses
• Create a team to assess people with intellectual and developmental disabilities, and stabilize them when they are having behavioral issues
• Create neighborhood outpatient center to treat behavioral health issues and promote health and wellness
• Create a 16-bed psychiatric crisis facility for extended observation
• Implement a health and wellness program for people with psychiatric illnesses that include tobacco cessation, healthy eating, a program to help navigate getting health care and a physical activity program.
• Expand mobile crisis outreach team
• Establish home health network to treat people who have chronic physical health conditions and behavioral health disorders
• Increase public understanding of mental illness and knowledge through certifying more mental health instructors
• Administer immunizations for high-risk populations at STD clinic
• Expand diabetes self-management and lifestyle classes among high-risk populations
• Develop an electronic medical records system
• Create a patient care navigation program
• Expand HIV/STD screening and counseling
• Coordinate substance abuse and homeless services projects
• Expand current efforts to reduce tobacco use