For first time, Central Health budget proposal has direct care for Travis County residents

The proposed 2023 fiscal year budget for Central Health looks different in two big ways from its previous budgets — and those changes are in areas of the budget that have drawn the most criticism from community groups, including a 2017 lawsuit.

For the first time since the Travis County hospital district was created in 2004, Central Health is budgeting for direct care instead of just purchased health services. There also is a change in the way the money for the University of Texas — which is used to support Dell Medical School — appears in the budget.

Central Health's board of managers is expected to vote on the proposed budget Wednesday before sending it to Travis County commissioners to consider for final approval. The commissioners are expected to vote on it Sept. 20.

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This year's Central Health budget calls for a lower tax rate because of the rising appraised values of Travis County properties. The budget for the 2023 fiscal year, which begins in October, will have a property tax rate of 9.864 cents per $100 valuation, compared with 11.1814 cents per $100 valuation in the 2022 budget.

For the average homeowner in Travis County, that will be a $3.99 savings compared with 2022, Lisa Owens, deputy chief financial officer for Central Health, said in her presentation to the community last week.

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Because of appraisal values and a few other sources of revenue such as a tobacco litigation settlement, Central Health expects to take in about $20 million more than in 2022, for a total of $300.7 million. It expects to spend an additional $94 million for a total of $302.3 million.

Central Health has come under fire from some community groups because it has not provided direct health care like some other hospital districts around the state. Central Health is unusual because it is a hospital district that does not run a hospital. Instead, Central Health pays area clinics and hospitals to take care of the population it serves, which are people whose family income is below 200% of the federal poverty level.

Central Health enrolls people who qualify in its Medical Access Program and Medical Access Program Basic plans, which act like insurance plans that pay for health care services. It also enrolls people who qualify in its Sendero Health Plan, a community-based insurance plan, through the Affordable Care Act marketplace.

In the coming fiscal year, Central Health has budgeted $5.7 million for direct care, in addition to $126.8 million in purchased health services.

Central Health plans to open clinics in Hornsby Bend and Del Valle in 2023. It also will update the Rosewood-Zaragosa Health Center to create a specialty care clinic. Central Health will hire a medical team to provide direct specialty care in podiatry, cardiology, neurology, gastroenterology, nephrology and pulmonology, instead of contracting through an existing health provider.

“This budget allows Central Health to continue our priority projects in eastern Travis County as well as work on the gaps in our health care delivery system as outlined in our Healthcare Equity plan, all while continuing to provide an increased level of healthcare services to our low-income population,” Dr. Charles Bell, chair of the board of managers for Central Health, said in a statement about the budget.

Central Health's funding of Dell Medical School will continue to go through the Community Care Collaborative nonprofit group it founded with the Ascension Seton hospital system in 2014. Dell Medical School receives $35 million annually through the collaborative, according to an agreement for a 25-year period with an automatic renewal for another 25 years.

Until now, Central Health has been able to use money from a federal program called Delivery System Reform Incentive Payment to fund the collaborative. In the previous fiscal year, that federal money was $15 million, but that program has now ended. For 2023, Central Health's budget calls for putting $22 million of its funds into the collaborative.

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The funding of Dell Medical School by the collaborative has been questioned by community groups and is the subject of a 2017 lawsuit. There also has been tension between the collaborative's partners and the medical school. Central Health in July asked the school to provide a more thorough accounting of how collaborative money is used to help the specific population served by Central Health.

Ascension Seton has asked Central Health to renegotiate the monetary terms of its partnership, including how much Central Health is reimbursing the hospital system for the care it provides and how much Ascension Seton gives to the collaborative.

If this budget is approved, total health care services will rise from $100.9 million in the previous fiscal year to $134.5 million in 2023. Health care operations will grow from $76 million to $123.7 million, which includes a $49 million transfer to its capital reserve fund, compared with $12.5 million in 2022. Overall administration and tax collection figures will rise from $15.4 million to $22.1 million.

The administration figures include more money for consultation services. Central Health will do a performance audit, as is planned for every five years and was required by Travis County commissioners in August.

Central Health's health care delivery contingency reserve will grow to $330.8 million from $226.5 million during the 2023 fiscal year. Its emergency reserve will stay at $38.7 million. Community groups and Ascension Seton have voiced concern about the amount of money in reserve compared with what Central Health spends on providing health services.

Central Health recently offered a community budget presentation in which it received no public comment. It will allow public comment before the board of managers votes at 5 p.m. Wednesday. That meeting will be in person at its offices at 1111 E. Cesar Chavez St. as well as virtually through a link on its website, centralhealth.net.

This article originally appeared on Austin American-Statesman: Austin's Central Health is considering direct care for the first time