In the latest test of public support for indigent care, voters in Travis County, Texas, which includes the state capital of Austin, will decide this week whether to create a healthcare district that could levy taxes and coordinate care countywide.
Approval of the May 15 ballot initiative would create a reliable funding stream and equalize the tax burden in the county of 850,000. Currently, Austin residents, who make up 77% of the county's population, pay an average of six times more to fund public healthcare than non-city residents.
Advocates include local hospitals, business groups and the county medical society. "We're the only major city in Texas that doesn't have a district. This is really an essential need," said Pat Hayes, chief operating officer of Seton Healthcare Network, Austin, which operates Brackenridge Hospital and Children's Hospital of Austin, the area's primary indigent-care providers.
As safety net hospitals nationally struggle with growing numbers of uninsured patients, the problem is especially acute in Texas, which has the nation's highest uninsured rate of 25%, according to estimates by the Urban Institute and Kaiser Commission on Medicaid and the Uninsured.
From a national perspective, odds favor passage. The National Association of Public Hospitals and Health Systems cited four ballot initiatives for its members since November 2002-all successful-in Denver, Los Angeles, Oakland, Calif., and Phoenix.
On a smaller scale, voters in Chambers County, Texas, near Houston, last week approved creation of a healthcare district to support indigent care provided at 25-bed Winnie (Texas) Community Hospital. The district is expected to raise $300,000 annually through a sales tax. Winnie Community, which is owned by a local investor, is believed to be the first investor-owned hospital in the state to be supported by a public healthcare district, according to its management.
But not all safety net hospital executives are optimistic. According to a report released last week by the Healthcare Financial Management Association, 36% of public hospital chief financial officers expect to rely more on local tax support in the future, but an equal number expect to become less dependent on local taxes.
"Clearly this split shows that some hospitals know they may need higher taxes to finance their mission, but others believe it might be impossible to get voters to swallow a bigger tax bill," according to the report, which is part of the HFMA's yearlong Financing the Future series.
Counties that already have districts want to move to regional funding in which surrounding counties pay the full cost of care when their residents seek treatment in other jurisdictions. But legislation that would have permitted future expansion of the proposed Travis County district to surrounding counties was defeated in the state Legislature last year.
The Legislature is currently studying the issue, and some anticipate a push next year to create incentives for outlying counties to join healthcare districts.
While many believe it's a good idea, "There does not seem to be much political traction because these other counties say, `We've got a good deal, why should we spend more money?' " said Charles Bailey, general counsel for the Texas Hospital Association.