An audible sigh of relief can be heard down at city hall this budget season,
now that Brackenridge is off the city’s books. The imminent merger between
city-owned Brack and private, non-profit Seton Medical Center has yet to be
signed, but once the deal is done this fall, the city’s responsibilities toward
public health care will extend only as far as funding the city’s clinics,
health programs, and the administration thereof, through the health department.
The city’s health care budget this year reflects three major issues: the
Brackenridge/Seton merger; clinic staffing; and new state legislation that will
force municipalities to implement managed care programs.
The Brack/Seton merger will certainly simplify things for city staff, and may
even result in the elimination of the Assistant City Manager who deals with the
hospital. Councilmember Brigid Shea says the elimination of the position will
save $120,000. The merger will also allow the city to shed Brack’s enormous
administrative duties and pay off $25 million of the hospital’s $54 million
debt, while Seton takes on the financial risk of providing care for many of the
city’s indigent patients who fall outside the city’s clinic system.
The shift of services and administrative duties to Seton and to the City of
Austin/Travis County Health and Human Services Department (HHSD) has meant more
responsibilities for HHSD, but not more funds. This year the city will provide
49% – $52.5 million – of the agency’s budget out of the general fund, slightly
less than last year’s funding. The agency’s services are shared by Travis
County, which will contribute $4.4 million toward the budget, 4% of the total.
The remaining 47% of HHSD’s budget comes from federal or state
reimbursements and grants. HHSD oversees the city’s primary health care system
in eight clinics under the Medical Assistance Program (MAP), with 43,000
eligible recipients enrolled. HHSD also runs five other public health programs:
Community Services; Communicable Disease; Environmental Health; Neighborhood
Services; and Planning, Assessment, and Evaluation of community needs.
Negotiations with Seton resulted in a commitment from the city to expand a
pilot managed care program to 13% of all MAP recipients. According to HHSD
spokesperson Dan Pickens, a survey of the managed care patients vs. clinic
patients revealed that while the level of service and satisfaction for both
programs was similar, the managed care program excelled in both cost savings
and efficiency.
The managed care paradigm has swept the health care industry, since it cuts
costs by grouping patients together under an umbrella health care provider such
as an HMO (health management organization). With large groups of patients under
their care, HMOs can negotiate for discounts from hospitals. Expanding the
managed care program will keep costs lower for both the city and Seton.
After the merger, Seton will be receiving the federal Disproportionate Share
(Dispro) funds formerly granted to Brackenridge for the “disproportionate”
number of indigent patients the public hospital sees; the amount varies each
year between $25-28 million. Primary care, whether through MAP or an expanded
managed care program, keeps patients healthier and out of the hospital, which
translates into Seton saving Dispro dollars for capital improvements at
Brackenridge.
The most heated controversy
around the health care budget this year has been the elimination of one
part-time and four full-time positions, people who provide referral services
for MAP recipients needing counseling, family planning, and other services
outside the MAP system. Of the 12 city social workers within the MAP system,
eight are Spanish-speaking. All five of those targeted for “reassignment” are
Spanish-speaking. That fact sparked an inquiry from Councilmember Gus Garcia,
who questioned the reasoning behind the decision by Sue Milam, director of the
city’s clinics, considering that many of the citizens in the MAP system are
Spanish-speaking. Milam’s response, echoed by Pickens, is that the
reassignments were based on tenure, nothing more. She admits, however, that the
loss of those five positions will mean that “some needs will go unmet. Those
remaining social workers will have to speed up the interaction with patients,
and may not be able to do all the listening they need to. However, the best
case scenario is that we streamline our approach, and have a closer team.”
Milam argues that the cuts were needed because the positions are not federally
funded as “core services” under guidelines of the Federally Qualified Health
Care program which reimburses the city for MAP services. $1.2 million in cuts
in federal reimbursements to the MAP clinics this year, confirms Pickens, means
cuts in “non-core service” staff.
Carol Guthrie, who heads up the AFSCME (American Federation of State County
& Municipal Employees) union, is organizing a fight to save the positions,
asking that the city contribute general funds, or cut vacant positions instead.
“It’s not a wise cut, and not necessary,” she says. “We’ve identified eight to
nine vacant positions that could have been eliminated in order to fund the
social workers.” Milam presented her suggestions to City Manager Jesus Garza’s
office last week.
That sigh of relief down at city hall may be a little premature. By merging with Seton, city officials have
responded to the changing health care market, but the market is demanding more.
As officials at both HHSD and the city’s budget office explain, providing
health care has never been so competitive or complicated, evidenced by the
battle going on over new state legislation that may remove the city and the
county from the health care system altogether.
SB 10, passed this session, is an attempt to reform Texas’ health care system
by requiring municipalities to hand over Medicaid reimbursements to the state,
which will then return the money to localities as block grants. These will go
to the cities for disbursement to a state-arranged managed care provider, or to
the public health care facilities. Officials from several Texas cities,
including Austin, are currently meeting to hash out an agreement with the state
on how they will participate. According to Mike Abkowitz, financial manager for
HHSD, the deal is still up in the air, but a direct disbursement of Medicaid
block grants to managed care programs could mean an end to our local clinic
system. Under the managed care disbursement scenario, he says, “One of the
delivery models the state is trying to do, is implementation of managed care on
a statewide basis… The state would administer health care for indigents in
the local communities. The city would then be faced with a policy decision on
whether to maintain the clinics with local funds. Our main concern is whether
there will be availability of care, integration of programs, continuity of
service, and links to social programs.”
SB 10 implementation is on hold pending the agreement between the cities, and
federal approval of several waivers, including lowering eligibility limits for
Medicaid reimbursement, which would allow Texas to be reimbursed for care to
those slightly above the federal poverty limit of $15,150 for a family of four.
Still under consideration are other waivers concerning what services are
covered, how they are delivered, how they are funded, and how they are
administered. “The feds are interested in capping their Medicaid expenditures,”
explains Abkowitz. “If the state can show that, in the long run, the cost
benefit is there, the feds will be interested.” The state’s application for the
waivers is expected some time next year; if it is granted, the city should
expect further simplification in its health care budget process, but perhaps at
the cost of hands-on contact with the citizens it exists to serve. n
This article appears in August 18 • 1995 and August 18 • 1995 (Cover).