Continuing Debate Concerning a Hospital District for Travis County
by Colin Guy

For many years now residents of Austin and Travis County have weighed the pros and cons of developing a countywide hospital district.

Currently, funding for the public hospitals in Austin is provided by property taxes: 7.1 cents per $100 of valuation for Austin residents and 1.3 cents per $100 of valuation for Travis County residents not living in Austin. The proposed hospital district that voters will decide for or against on May 15 would require that Travis County residents outside of Austin contribute more money for health services.

Brackenridge Hospital, owned by the city of Austin and managed by Seton Healthcare Network, is the only trauma center in the area. As such, the hospital is a vital resource not only for the residents of Austin but for many other people in Travis County, Williamson County, and the surrounding region.

By law, Brackenridge is not permitted to turn away anyone that is taken to their emergency room, regardless of whether or not the patient has insurance or the capability to pay for services rendered.

Nearly a quarter of the Central Texas population does not have health care coverage. Proponents of the hospital district believe that increasing the amount that non-Austin residents of Travis County pay for health services is only fair, and will help alleviate what many see as a looming health care crisis.

The hospital district’s steering committee has estimated that the extra revenue provided by the district would provide an additional $5 million for health services.

“Seton is required to report costs associated with uncompensated care to the Texas Department of Health every year,” said Michele Gonzalez, public information officer for Seton Healthcare Network. “The information the State wants is the amount of Charity Care (which is the cost of providing care), plus what is known as ‘Community Benefit’ (this includes contributions to health education and prevention services in addition to a portion of high-cost essential medical service). In 2002, that dollar figure for Seton was $128,541,000.”

Proponents of the hospital district believe that there will be many more advantages to the establishment of a hospital district, beyond the added revenue.

“It would create a more equitable system,” said Rep. Elliott Naishtat. “All residents will be taxed equally.”

Naishtat and other proponents of the plan also emphasized that the hospital district would increase efficiency of health services in Austin.

“It would consolidate the functions of city and county to one health care center,” Naishtat said. “With a hospital district there would be one administration.”

If the ballot initiative is passed on May 15, the plan calls for the development of a nine-member city-county appointed board that would oversee the city-county hospitals and clinics in Travis County. The board would be composed of four appointees from the city of Austin, four from Travis County, and one consensus appointee. The board would strive to develop strategies to address such problems as overuse and crowding of emergency rooms and the rising number of uninsured patients.

“Seton is very supportive of the hospital district,” said Mark Hazelwood, Vice President of Planning Marketing and Public Affairs at Seton Healthcare Network. “The important thing is putting in place a structure to take care of the health care needs of the city and county.”

Opponents of the hospital district are opposed to the development of a new taxing entity. Although the current plan is to raise the taxes of non-Austin residents in the district to be equal to those of Austinites, the district would have the ability to raise taxes as high as 25 cents per $100 of valuation.

In an email Richard Relph, the Communications Director for “Save Our Taxpayers,” listed several reasons that he opposes the development of a Travis County hospital district. Relph believes that the district is unnecessary, would be ineffective, and that the law itself is not well written. “The district can be created by a vote,” Relph wrote, “but state law does not seem to permit the dissolution of the district at all, under any circumstances.”

Austin is currently the only major city in Texas without a hospital district. Health districts in other Texas cities currently pay around 20 cents on average. State law prohibits hospital districts in Texas from raising taxes above 75 cents.

Relph wrote that there are serious health care financing issues in Travis County, but that the same is true of Harris County, Dallas County, and Bexar County. He added that hospital districts had not alleviated the financial difficulties of these counties.

Naishtat believes that the people of Austin will overwhelmingly vote in support of the district, but that non-Austin residents of Travis County may be reluctant to vote for what would amount to an increase in taxes for them.

“There are some people out in the county that would like to keep the system the way it is,” Naishtat said. “They’re getting away with murder by using the same resources and paying far less for them.”

According to Gonzalez, during Seton’s 2003 fiscal year Travis County residents living outside of Austin represented 9.02 percent of all visits to Brackenridge Hospital by Travis County residents. Patients from outside of Travis County represented represented 14.79 percent of the total visits to Brackenridge Hospital that year.

Although the current incarnation of the hospital district proposal does not call for the establishment of a multi-county district, many of its supporters envision this as a possibility in the future. Many of the district’s proponents believe that it is likely that other counties would like to join the district, and that this would further help alleviate some of the region’s health care concerns.

Should the citizens of Travis County elect not to establish a hospital district, it seems unlikely that the proposal will die an easy death. With only 100 signatures required to place the initiative on the ballot, it is highly probable that the issue will be placed before the voters again and again, year after year, until it is passed.

– From the May 2004 Austin Review