Health officials want to redefine who can get low-cost health care

Aug. 31--For the first time since its creation in 2004, the taxing authority that oversees health care for needy Travis County residents is trying to fundamentally change who would be eligible for free or low-cost services.

In redesigning the health care system for uninsured and underinsured county residents, Central Health officials are discussing how to categorize patients based on medical need, while potentially raising the income threshold for services. The Central Health board this spring discussed boosting the threshold from its current maximum of $48,500 for a family of four to nearly $91,000.

That idea went over with a thud, but it's not entirely off the table. Central Health staff is exploring options and the impact on taxpayers.

A fleshed-out proposal is expected in November, but the discussion is underway now because of an unusual partnership between the public Central Health and the private Seton Healthcare Family. The two created the nonprofit Community Care Collaborative in 2013 to produce a better coordinated, more integrated care delivery system for the safety net population they serve. And now they are trying to put that system in place as their answer to fixing a fragmented, inefficient network of care.

It comes at a time of uncertainty about how much federal aid will be available for indigent health care after Sept. 30, 2016. That's the expiration date of a Medicaid program that is expected to generate nearly $260 million in the new fiscal year for Travis County safety net providers -- unless the federal government renews it.

In addition, Central Health faces other financial pressures, including sustaining a health insurance plan that has struggled financially since the Central Health board created it in 2012.

"We are knitting together a system of care," said Central Health President and CEO Patricia Young Brown, chair of the collaborative. "We're trying to close the coverage gap."

Gaps and inefficiencies occur now, she said, because people who cannot afford health care tend to put it off until they end up sicker -- with even bigger bills that they can't pay.

"If we could provide better care in the outpatient environment to a larger number of people, then we could begin to figure out how to blunt the amount of dollars we spend in the most expensive of environments" -- emergency rooms and hospital beds, said Dr. Mark Hernandez, the collaborative's chief medical officer.

Money that is now needed to cover more costly care can become savings that get reinvested, he told the board in May.

That's a key concept behind the integrated delivery system.

John Stephens, the collaborative's executive director, said a goal is to separate patients into groups based on how healthy they are so that those with the most chronic conditions get more attention and remain out of the hospital. He told the Central Health board in May that if it's financially feasible, the collaborative wanted to expand coverage to residents whose incomes are 375 percent of the federal poverty level, or $90,938 for a family of four.

That percentage was chosen as a discussion starter because it is the threshold Seton uses when considering charity care for patients, Hernandez said.

Central Health's Medical Access Program, or MAP, covers residents who are at the federal poverty level; it goes up to 200 percent if they are disabled or elderly. Patients with incomes between 100 percent and 200 percent of the federal poverty level who don't qualify for MAP can pay on a sliding-fee scale.

Central Health board members immediately raised concerns about pushing the eligibility threshold up to 375 percent of the poverty level.

"The board is concerned that, my God, we're going to blow the budget out of the water," board member Clarke Heidrick said at a meeting Aug. 12.

Heidrick said in an interview later that he was reflecting the heartburn of other board members about the potential impact on taxpayers and concerns about taking resources from one group and giving them to another. Personally, he said, he would favor expanding coverage, if the board can afford it.

Young Brown disagreed that overhauling coverage benefits would necessarily cost taxpayers more. Central Health's affiliated CommUnityCare clinics saw 96,000 patients last year. If more patients have a medical home and stay out of ERs and hospitals, then costs can be better controlled, she said.

The board's role is a balancing act: to protect taxpayers while being fair to Seton, Central Health board member Kirk Kuykendall said.

That public-private relationship, which extends into the coming decades, is financially complicated.

Seton is investing in the collaborative and building a $295 million teaching hospital that it will own where indigent patients will receive care. A legal agreement between Central Health and Seton allows Seton to retain $20 million a year for five years, a total of $100 million, to cover the costs of transitioning to the integrated delivery system, including hiring staff, setting up a call center, creating electronic records and other work, said Seton executive Greg Hartman, vice chairman of the collaborative.

Some observers have questioned whether Central Health is going too far to appease Seton, which has the right, under the legal agreement, to mutually decide with Central Health who should be eligible for taxpayer-subsidized health care services.

Bob Ozer, an Austin lawyer who has questioned Central Health about the $20 million a year, said no controls are on that money, which otherwise would have been spent on the safety net population. "My concern is the money could be used to defray the cost of a teaching hospital that Seton is building," he said.

Hartman said the $20 million is not a payback for building the teaching hospital but for transitioning to the new integrated health care system. Seton has committed to being the primary safety net provider in Travis County for many years, in addition to building the hospital and spending tens of millions of dollars a year on training doctors, he said.

As Seton works with Central Health to redesign benefits, Hartman said he doesn't see taxpayers picking up a greater share until "we have exhausted efforts to make the system work better -- meaning better access and higher quality for the same cost."

Seton's operation of University Medical Center Brackenridge saves residents millions of dollars a year, Young Brown said, adding: "I don't think this community has recognized the value of this public-private partnership."

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