Central Health Fiscal Year 2017 Proposed Budget and Tax Rate

Travis County Commissioners Court Aug. 23, 2016 Patricia Young Brown, President and CEO; Jeff Knodel, CFO; Larry Wallace, Executive Vice President and COO

Central Health’s Mission

As told by the members of our community •  Esma Kitchum, a patient at the

Central Health Southeast Health & Wellness Center

•  Esma will be featured in an upcoming episode of our podcast series “Central Health Stories”

•  www.centralhealthstories.org

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How Central Health Funds Health Care

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$ $$$

$$$

How Central Health Funds its Mission in 2016

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The Result: Maximizing Your Tax Dollar for Health Care

For every

$1 of Central Health tax revenue collected in 2016

$3.59 in health care services are provided to the residents of Travis County

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FY17 Proposed Tax Rate (4.5% over Effective Rate)

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FY16 FY17 (Proposed)

Average Taxable Homestead Value

$262,874 $285,152

Tax Rate 11.7781¢ 11.0541¢

Tax Bill $309.62 $315.21

Annual Increase = $5.59 (1.8%)

Central Health Property Tax Impact Statement: Fiscal Years 2016-17

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Actual Appreciation

Rate Home Value

Taxable Homestead

Value

4.5% Over Effective Tax

Rate Tax Bill Annual

Increase

- 200,000 160,000 0.117781 $188 -

- 300,000 240,000 0.117781 $283 -

- 400,000 320,000 0.117781 $377 -

- 500,000 400,000 0.117781 $471 -

9% 218,000 174,400 0.110541* $193 $4

8.5% 325,500 260,400 0.110541* $288 $5

7.6% 430,400 344,320 0.110541* $381 $4

7.3% 536,500 429,200 0.110541* $474 $3

FY16

Bas

elin

e FY

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4.5% over Effective Property Tax Rate Year-over-Year Forecast

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$0$20$40$60$80$100$120$140$160$180$200$220$240

FY17 FY18 FY19 FY20 FY21

TotalSources TotalUses TotalReserves EmergencyReserve

(In millions)

FY16 Percentage Share of Travis County Taxing Jurisdictions

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21.2%

16.4%

53%

4.8%

4.6%

City of Austin

Travis County

Austin ISD

Austin Community College Central Health

Major Texas Hospital Districts: FY16 Tax Burden Comparisons

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Major Texas Hospital Districts: Debt and Pension Comparisons

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Central Health FY17 Proposed Uses

95.8%

3.6% 0.6%

HealthCareDelivery

AdministraMon

TaxCollecMon

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Central Health FY17 Proposed Budget

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Description FY16 Approved Budget FY17 Proposed Budget

Tax Rate 0.117781 0.110541

Sources Property taxes 160,705,076 169,806,722 Seton lease revenue 34,371,988 31,544,675 Interest 400,000 400,000 Tobacco litigation settlement 1,600,000 1,800,000 Subtotal revenue 197,077,064 203,551,397 Contingency Reserve 98,700,000 36,600,000 Total Sources 295,777,064 240,151,397

Uses Health care delivery 188,995,853 197,767,552 Contingency reserve - allocated 68,400,000 - Contingency reserve - unallocated 28,692,540 31,970,653 Total health care delivery 286,088,392 229,738,205 Administration 8,262,466 8,926,601 Tax collection 1,426,205 1,486,591 Total Uses 295,777,064 240,151,397

Reserves (ending balance)

Capital - -

HMO Risk-based Capital Reserve - -

Contingency Reserve - -

Emergency Reserve 28,515,000 29,895,000 Total Reserves 28,515,000 29,895,000

Central Health FY17 Proposed Uses

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Description FY16 Approved Budget FY17 Proposed Budget

USES

Health Care Delivery

Intergovernmental transfers 134,700,000 141,570,000 Central Health payment to Community Care Collaborative 26,245,166 26,245,166

Health care operations and services 14,043,890 14,553,195

Health care initiatives 2,098,713 5,146,388

Debt service 1,368,805 1,372,803 Transfer to capital reserve 3,000,000 1,500,000 Transfer to emergency reserve 2,539,279 1,380,000 Sendero risk-based capital 5,000,000 6,000,000 Subtotal Health Care Delivery 188,995,853 197,767,552 Contingency reserve - allocated 68,400,000 - Contingency reserve - unallocated 28,692,540 31,970,653

Total Health Care Delivery 286,088,393 229,738,205

Administration 8,262,466 8,926,601

Tax Collection 1,426,205 1,486,591

TOTAL USES 295,777,064 240,151,397

Central Health— FY 17 Proposed Uses: Intergovernmental Transfers

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•  Local funds used to match federal funds

•  Federal and state match rate requires larger share of local funds in FY17

Intergovernmental Transfers (IGT) FY16 FY17

IGT - Private Uncompensated Care 27,900,000 27,900,000

IGT - Public Uncompensated Care 28,700,000 25,000,000

IGT - Disproportionate Share 23,300,000 32,500,000

IGT - DSRIP 54,800,000 56,170,000

Total 134,700,000 141,570,000

FY17 Central Health Key Initiatives

Strategic Principle: Stewardship •  Delivery System Reform Incentive Payment (DSRIP) operations and program

renewal—Central Health, CCC •  Expansion of Affordable Care Act (ACA) subsidy—Central Health

Strategic Principle: Partnership •  Redevelopment of the Central Health Brackenridge Campus—Central Health •  Central Health promotion, education, and community engagement—Central Health

Strategic Principle: Transformation •  Improvement of specialty care—CCC •  Improvement and redesign of Medical Access Program (MAP)—CCC •  Enhancement of primary care continuum—CCC •  Transition to value-based payments—CCC

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Funding Health Care: The Community Care Collaborative

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The Community Care Collaborative Central Health and the Seton Healthcare Family partnered in 2013 to create the Community Care Collaborative to knit together fragmented pieces of the local health care system.

Central Health provides financial support to the CCC as well as matching federal dollars.

Seton provides financial support and health care services including specialty care to the CCC.

The Community Care Collaborative is developing new, innovative and cost-effective health care delivery methods to serve the safety net population in Travis County.

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FY17 Key Initiatives: Transformation—Specialty Care

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Goal: Reduce time to diagnosis Strategy •  Increase specialty care access •  Enhance connectivity between primary care providers and specialists •  Utilize technology for consultations •  Develop new models of care with Dell Medical School Existing programs •  Orthopedics, gastroenterology, cardiology, urology, rheumatology, endocrinology,

neurology, opthamology New programs in FY17 •  Otolaryngology (ear, nose and throat), complex gynecology, dermatology,

pulmonology, allergy

Medical Access

Program

FY17 Key Initiatives: Transformation—MAP Improvement and Expansion

Sliding Fee

Scale Program

•  Health Risk Assessment •  Free preventive services

•  Alternative therapies for pain

management •  Group health education •  Post-acute care expansion •  Palliative care, including hospice •  Primary care behavioral health •  Substance abuse treatment •  Complex care management

Proposed Pilots

Expand Coverage

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Goal: Improve health outcomes

FY17 Key Initiatives: Transformation—MAP Improvement and Expansion

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High Risk Patients

Medium Risk Patients

Low Risk Patients

Clinical Care Plan

Convenient Care

Medical Home

Urgent Care

Emergency Care

Less Expensive More Expensive

•  Review network capacity

•  Utilize care management

FY17 Key Initiatives: Transformation—Enhancement of Primary Care Continuum

•  Partner with additional convenient, walk-in care

•  Expand urgent care network

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FY17 Key Initiatives: Transformation—Value-Based Payment

Goal: Increase value to patients, partners and the public by improving patient outcomes while lowering the per capita cost of care Incremental steps under consideration include: •  Continue the DSRIP value-based payment (VBP) contract structure •  Promote use of nurses, clinical pharmacists, and other health care

professionals •  Add payment for case managers and other patient-centered support

services so patients can be active participants in improving their health •  Create financial incentives to achieve better patient health outcomes

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FY17 Key Initiatives: Stewardship—DSRIP Demonstration Year 6 and 1115 Waiver Renewal

•  Demonstration Year 6 (DY6) is continuation of DY5 –  DY6 will continue through 12/31/17 –  Next 1115 Waiver is anticipated to begin 1/1/18

•  Projects must continue in DY6 to maintain funding allocation in DY7 and thereafter

•  Outcome measures will continue as pay-for-performance and require improvements over DY5 achievement

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FY17 Key Initiatives: Stewardship—Health Coverage Expansion

•  Expansion of covered population •  Targeting residents at 101-150% of the federal poverty level (FPL)

in Travis County

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Sliding Fee Scale Covered Population

Affordable Care Act Subsidy

FY17 Key Initiatives: Partnership—Central Health Brackenridge Campus

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Timeline •  Request for Qualifications (RFQ)

issued by September 2016

•  Request for Proposals (RFP) issued by January 2017

•  Hospital moves May 2017

Budget Timeline •  Aug. 31 First public hearing •  Sept. 7 Second public hearing

•  Sept. 14 Central Health Board of Managers

(Approval of FY17 Central Health budget)

•  Sept. 20 Travis County Commissioners Court (Consideration of FY17 Central Health proposed budget and property tax rate)

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(512) 978-8000 www.centralhealth.net @centralhealthtx