St. David's opposes Prop 1 - Central Health

AUSTIN (KXAN) - After months of careful consideration and discussion with stakeholders, St.David’s HealthCare is opposing Proposition 1, which is a tax-increase initiative on the Nov. 6 ballot, officials announced Wednesday.

“We are very supportive of bringing a medical school to Austin,” David Huffstutler, president and chief executive officer of St. David’s HealthCare, said. “But we do not believe that this is the appropriate way to fund it. Funding healthcare for uninsured people in Travis County is Central Health’s primary mission and should be its first priority before it spends taxpayer money on other, indirectly related activities.

"As an organization that provides care to nearly half of the indigent and unfunded patients in Central Texas, St. David’s HealthCare has an obligation to educate and inform the community of the full story behind Proposition 1.”

On Nov. 6, voters in Travis County will decide the fate of a 63 percent tax increase proposed by Central Health—from 7.89 cents per $100 of assessed home value to 12.9 cents. According to Central Health, the revenue raised by the tax increase—an estimated $54 million—would help create a medical school in Austin.

“Right now, Travis County taxpayers, including St. David’s HealthCare, are substantially carrying the burden for indigent care for Travis and surrounding counties,” Huffstutler said. “The number of uninsured patients is steadily increasing, and the cost to provide their care grows proportionally. In addition to paying taxes, St. David’s HealthCare hospitals are obligated to provide, without payment, care to uninsured patients through our emergency rooms. Our hospitals lose millions of dollars each year providing care to those patients. The only way to offset these expenses is to shift those costs to insured patients whose premiums rise accordingly.

"If the tax increase being proposed was going to be used to directly fund indigent patient care, which is the purpose of Central Health as stated in its bylaws, we would endorse it. But Proposition 1 asks voters to authorize paying much higher taxes with almost no additional incremental indigent care provided as a result. Before spending millions of tax dollars on a medical school, we want Central Health to meet their primary obligation of providing indigent care in Central Texas, and to relieve us of some of the burden we already carry for the District.”

Huffstutler said he was concerned that Central Health intends to use local tax revenues to support clinical programs at University Medical Center Brackenridge, which means the resident and faculty physicians who provide care in that facility. The Seton Healthcare Family currently funds these programs because these residents and faculty are necessary to provide patient care at Brackenridge, which Seton leases and where it has a fiduciary responsibility to provide the care.

“By relieving Seton of this expense, Central Health is making it possible for Seton to redirect funding toward a medical school, which is an unrelated function of Central Health, or to a new teaching hospital, for which Seton has a financial responsibility,” Huffstutler said.

“This is not an anti-tax or an anti-medical school issue,” Huffstutler said. “This is an issue about ensuring a taxing authority is doing what it was created to do.”

Athletes from The University of Texas all receive care at St. David's HealthCare via a contract with the university. However, UT can still choose to send its injured athletes to any facility it chooses, according to a story published in January in "The Horn."

The arrangement between the two organizations is planned so that UT will receive a large payment each year, anywhere from $650,000 for the first year to $753,528 in the last year of the contract, the article stated. St. David’s will provide services to student athletes expected to total about $250,000 each year.

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In May, the UT Regents gave the go-ahead to establish a medical school at the Austin campus, and promotion of the project and funding has been spearheaded by Sen. Kirk Watson, D-Austin, as well.

At the time, UT committed $25 million annually and $5 million for eight years for the project. Watson expects as much as $35 million can be raised privately to get the medical school started, according to what he said in May.

Watson first called for a new medical school to be built in Austin more than a year ago. He believed it could be built and running by 2021. He believes it will bring 15,000 jobs and inject $2 billion into Austin’s economy.

The opposition of St David's HealthCare to the project is 180 degrees in the other direction from what Seton Health Care wants -- In April Seton Healthcare Family announced they want to supply the $250 million to pay for it, as part of replacing UMC Brackenridge.

"The teaching hospital of tomorrow is going to look very different than the hospital of today, or even the hospital that we see there," said Seton Healthcare Family Board Chairman Charles Barnett at the time.

Two weeks out from the election, citizens will see begin to see television commercials from the group that supports the building of a teaching hospital and its accompanying tax increase. Keep Austin Healthy PAC said Wednesday its advertisement outlines the facts about Proposition 1-Central Health. It says both the Austin Chronicle and Austin American-Statesman have endorsed the proposition, along with more than 40 other organizations.

What is Proposition 1 - Central Health?

If Proposition 1 -- shown on the city of Austin ballot as "Prop. 1 Central Health" -- passes on the Nov. 6 election, it will mean a property tax rate increase in Travis County by about 7 cents per $100 of assessed value.

This proposition is different from the city of Austin's "Prop. 1" listed on the ballot, which ask voters if they want to change the charter and move the city’s general election date from May to November.

 

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The ballot wording is as follows, in English and in Spanish:

All precincts / Precintos enteros:

PROP. 1, CENTRAL HEALTH
(PROP. 1, CENTRAL HEALTH)
Approving the ad valorem tax rate of $0.129 per $100 valuation in Central Health, also known as the Travis County Healthcare District, for the 2013 tax year, a rate that exceeds the district’s rollback tax rate. The proposed ad valorem tax rate exceeds the ad valorem tax rate most recently adopted by the district by $0.05 per $100 valuation; funds will be used for improved healthcare in Travis County, including support for a new medical school consistent with the mission of Central Health, a site for a new teaching hospital, trauma services, specialty medicine such as cancer care, community-wide health clinics, training for physicians, nurses and other healthcare professionals, primary care, behavioral and mental healthcare, prevention and wellness programs, and/or to obtain federal matching funds for healthcare services.

(Aprobar la tasa del impuesto ad valoren de $0.129 por cada $100 de valuación fiscal en Central Health,
también conocido como Travis County Healthcare District, para el año fiscal 2013, dicha tasa excede la tasa máxima fiscal del distrito. La tasa del impuesto ad valoren propuesta excede por $0.05 en $100 de valuación fiscal a la tasa de impuesto ad valoren más reciente que el distrito adoptó; los fondos se usarán para mejorar los servicios de salud en el Condado de Travis, incluyendo apoyo para una nueva escuela de medicina de acuerdo con la misión de Central Health, un sitio para un nuevo hospital de educación médica, servicios de traumas, de especialidades médicas tales como atención médica para el cáncer, clínicas de salud en la comunidad entera; capacitación para médicos, enfermeras, y otros profesionales de servicios de la salud, atención médica primaria, servicios de salud mental y para trastornos de la conducta, programas de prevención y bienestar físico, y/o para obtener fondos federales igualados para servicios de salud.)