Health Spending Expected to Grow

When I turned on the computer early the morning of July 29, 2015, the “inbox” was filled with articles from multiple media sources with such headlines as:

  • By 2014, Health Spending will be Nearly a Fifth of the Economy (The Washington Post Wonkblog)
  • Health Spending Projected to Grow Modestly, but Faster (USA Today)
  • Health Care Spending Again Accelerating (Politico)
  • Health Care Spending to Accelerate (Associated Press)
  • US Health Spending Growth Jumped to 5.5% in 2014 (Wall Street Journal)

It appears that health care spending is rising at a faster rate than at any time since the Great Recession; costs in 2014 rose 5.5 percent. Economists predict that the annual rise in health care costs will increase by 5.8 percent over the next decade.

In light of other recent stories that have hailed the Affordable Care Act (Obamacare) successes in bringing down the cost of health care, a June 20 Journal of the American Medical Association research article reports that 7.9 percent of Americans were uninsured during the first quarter of 2015. The report also noted that uninsured rates among Latinos dropped by 11.9 percentage points. The study’s author, Benjamin Sommers of Harvard, said, “The ACA may be associated with reductions in longstanding disparities in access to health care,” through improved access to care.

Reuters has reported that Sommers’ study notes that about 15.8 million adults gained insurance coverage under ACA since 2013 and about 7 million more adults surveyed said that they now had a personal physician. Another 4.8 million said that they can now afford their medications.

Doing the math

I never claimed to be a math whiz, but I just cannot get my arms around the numbers.

We have seen a recent (2012-2014) cooling off in the escalation of health care costs, which many have attributed to the ACA. In 2013, the US economy spent 17.4% of our GNP on health care, but Levey reports in the June 29 Los Angeles Times that “by 2024, healthcare is projected to consume 19.6 % of the economy.”

Hold on! That’s a pretty big increase in just nine years. Why the dramatic rise in costs?

I’m just thinking out loud, but I wonder if there ever was a real decrease in health care costs that could be attributed to the ACA. Was that downturn in cost more likely due to the economy being in the doldrums and even people with insurance postponing needed medical care because of high co-payments? Who has done that study?

I wonder, too, about the recent increase in spending. Is that just because more people are insured now and can afford to pay for services? Or is the predicted increase because old guys like me are consuming health care at a greater rate, living up to the concerns that Baby Boomers will break the bank for all of America?

If you factor in expanded coverage of care (ACA), that aging population (Baby Boomers) and society’s demand to live forever (coupled with a generous desire to remain beautiful and fit while doing so), you have the perfect recipe for the predicted $5.4 trillion in health care spending by 2024—or about 20 percent of the US budget. (Currently, health care spending is $3.1 trillion a year.)

Another factor driving up the cost of health care is the demand for newer and more effective pharmaceuticals. These usually fall into two categories: treatment for hepatitis C and treatment for cancer. Prescription drug spending increased 2.5 percent in 2013, but was up by 12.6 percent in 2014.

And, the ever-expanding Medicaid and Medicare rolls contribute to overall increases as well. Medicare and Medicaid turned 50 on July 30. Although we can celebrate the fact that older Americans no longer have to worry about access to health care, we still must be concerned about the skyrocketing cost associated with both programs. Through them, the government will become the dominant player as it assumes a greater share of the health care costs, from 43 percent in 2013 to 47 percent in 2024.

A brief history of health insurance in America

The provision of health care benefits grew out of the Kaiser Company’s need to keep its weapons-manufacturing plants staffed during World War II; Kaiser was the first to offer health care benefits to attract employees. The federal government had frozen wages for workers during the war effort, so the health benefits were a significant drawing card for employees.

Multiple efforts were made over the ensuing years to expand health care coverage, but it was not until Lyndon Johnson’s Great Society initiative that Medicare and Medicaid entered the American health care scene, to provide a safety net for seniors, the disabled, children and certain other groups. Until that time, the only way to get health coverage was to pay for a private policy out of pocket or join a group policy offered by an employer.

But, the unemployed and working poor had virtually no access to health insurance because they didn’t have an employer-provided plan and/or they had too little discretionary income to afford to purchase insurance outright. And many didn’t qualify for Medicare or Medicaid coverage.

In order to address the number of uninsured, most hospitals unofficially adopted a “cost shifting” model to help pay the costs incurred in treating the uninsured. In other words, insured patients paid more than their share of the cost of care because hospital charges were marked up to account for the anticipated failure to collect on charges from uninsured patients. This predictable math equation is not much different from the markup retail stores place on items to cover their costs associated with shoplifting or damage of goods in their store.

Over the past several decades, as the number of uninsured has grown due to economic downturns and welfare reform, so has the outcry from the insured that they were being charged more than fair market value for services in hospitals and clinics. Their unofficial subsidy to the uninsured was deemed discriminatory or unfair. Congress responded to the public’s demand to address the insurance and health care access problem by passing the Affordable Care Act as proposed by President Obama.

The ACA/Obamacare was intended to level the playing field by making insurance required of and accessible to everyone—whether through an employer or through state and federal insurance exchanges.

That health insurance was going to be affordable with four categories: Platinum, Gold, Silver and Bronze. And, a penalty was to be levied on anyone who purchased a health care policy that was a “Cadillac plan” – whatever that is! A year passes and the Bronze plan is defunct. And, more than 15 percent of the people who originally purchased health insurance have failed to sign up for the next round, instead electing to pay the penalty, since it is cheaper than the insurance.

Next, we see from the reports above that the cost of health care is going up! Should we be surprised? The hospitals had already built in “up-charges” to cover those who did not have insurance, through cost-shifting. It is unlikely those charges went away after the ACA was enacted.

More insured people use more insurance to consume more health care, resulting in increased health expenditures. No surprises there, right? What does remain a mystery: How do we get a handle on the costs?

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Scenes from the 84th Legislative Session

Our state Capitol is a beautiful place. It is a majestic building with a grand dome that is beautiful inside and out. As one walks through the front gates at 11th and Congress (the south side), the full grandeur of the building and grounds makes quite an impression.

Each day as I walk through those gates, I encounter people from all over our state and from all over the world coming in to see the Capitol building or to participate in the political process. Often the grounds are filled with school children and other groups who have come to see democracy in action. One might find a group from Paris, Texas, under a giant circus tent treating all the crowds to free barbeque, or a group of protesters / demonstrators lined up at the entrance on the street or on the Capitol steps with signs and chants on the topic of the day.

Everyone has their day at the Capitol:

  • Doctors Day (First Tuesdays), Chamber of Commerce Days, Nurses Day, OT Day, PT Day, Indian-American Day, Black Caucus Day, Muslim-American Day, Pro-Abortion Groups, Anti-Abortion Groups, State Employee Lobby Groups, Public School Lobby Groups, Home School Lobby Groups, Charter School Lobby Groups, et al. I think there may have even been a recognition for third cousins, once removed!
  • And on and on and on …..

It is everyone’s Capitol. Walk inside the entrance and through security (by the way, if you have a “concealed carry” permit, you can bypass security) and as you enter the great dome you will find lobbyists chatting with each other, tourists trying to get the best photo of the ceilings, posing in front of George W. Bush’s portrait for a photo, standing in the star in the center to hear the marvelous echo, laying down on the floor to get a photo of the rotunda (it is really easiest to just put your camera on the floor in the center of the star and shoot the picture; it will be perfect), and looking at all the great art on the entry walls depicting the Texas War for Independence, the Battle of San Jacinto, and portraits of Davy Crockett and others. And, don’t forget to check out the floors.

It is indeed overwhelming.

If you are under the great dome at noon, you may enjoy the music of a high school choir, a symphony, a mariachi band, or a country and western performance. You may bump into anyone from actors and musicians, to astronauts and Olympians. You will see millionaires and homeless people plodding the same halls. You will encounter every race, color, creed and religion in the world. You will see the able-bodied and the disabled, the old and the young, the gay and the straight, the immigrant and the undocumented, all in pursuit of their objectives related to the rules and regulations that govern lives.

Offices in the Capitol main building are reserved for members with greatest seniority. The House offices are located on the left (west) wing, and the Senate offices are located on the right (east) wing. The Speaker of the House has apartments in the west wing, as well as his main office suite. Other senior members also are located in this wing. On the east wing, the Lt. Governor’s suite of offices extends from the Ground (basement) all the way up to the top floor, along with senior Senators and their staffs. There are also member offices scattered through the north and south wings of the main structure.

On the north side of the Capitol is a vast undergrown structure filled with two floors housing member offices and hearing rooms. This is really the “guts” of activity during the committee process, where both the Senate Finance and the House Appropriations Committees meet, along with almost all other legislative committees. The public crowds into these hearings, often resulting in standing room only and/or use of “overflow” rooms. Hearings may last from a few hours to all night. Persons testifying related to bills may be few to many (more than 300). All must register to testify and must take a position of “for,” “against” or “on” the bill.

I hope you enjoy these images of Capitol life from the 84th Legislative Session.

Throughout the 140 days that the Legislature meets every other year in Texas, the visual senses are filled with images of the countless visitors to the Capitol.

Throughout the 140 days that the Legislature meets every other year in Texas, the visual senses are filled with images of the countless visitors to the Capitol.

Knowing where there is an abundance of nuts on the grounds, squirrels scamper around the Capitol.

Knowing where there is an abundance of nuts on the grounds, squirrels scamper around the Capitol.

The Capitol grounds have gotten a facelift over the past few years, making the area an inviting park for tourists, joggers, fitness workout groups and school picnics.

The Capitol grounds have gotten a facelift over the past few years, making the area an inviting park for tourists, joggers, fitness workout groups and school picnics.

Upon entering the Capitol and passing into the rotunda, one stands in awe of the majesty of the history of Texas, as portraits of past Governors hand on the walls from floor to ceiling.

Upon entering the Capitol and passing into the rotunda, one stands in awe of the majesty of the history of Texas, as portraits of past Governors hand on the walls from floor to ceiling.

One of my favorite portraits hangs on the right as one walks into the rotunda.  For the past 15 years, George W. Bush’s image has occupied the “Immediate Past Governor” place of honor.  This year, it will be moved over one spot, and the portrait of Governor Rick Perry will replace it.

One of my favorite portraits hangs on the right as one walks into the rotunda. For the past 15 years, George W. Bush’s image has occupied the “Immediate Past Governor” place of honor. This year, it will be moved over one spot, and the portrait of Governor Rick Perry will replace it.

The House chamber is expansive.  Contrary to popular myth, Democrats do NOT sit across the aisle from Republicans. In fact they all sit based on seniority across the floor of the House.  No one is allowed on the floor except staff when the chamber is in session.  150 desks are paired across the carpet.

The House chamber is expansive. Contrary to popular myth, Democrats do NOT sit across the aisle from Republicans. In fact they all sit based on seniority across the floor of the House. No one is allowed on the floor except staff when the chamber is in session. 150 desks are paired across the carpet.

Each session, the Governor delivers a “state of the state” address and lays out his budget priorities.  This year, newly elected Lt. Governor Dan Patrick and returning Speaker of the House Joe Straus welcomed Governor Abbott and his family to the House podium.

Each session, the Governor delivers a “state of the state” address and lays out his budget priorities. This year, newly elected Lt. Governor Dan Patrick and returning Speaker of the House Joe Straus welcomed Governor Abbott and his family to the House podium.

UTMB students participating in TMA’s First Tuesday program met up with Rep. Susan King and UT System’s new Chancellor, Admiral Bill McRaven.

UTMB students participating in TMA’s First Tuesday program met up with Rep. Susan King and UT System’s new Chancellor, Admiral Bill McRaven.

More than 60 UTMB SOM students participated in the 2015 First Tuesday “meet and greet” with their legislators.

More than 60 UTMB SOM students participated in the 2015 First Tuesday “meet and greet” with their legislators.

Four UTMB students returned to the Capitol for further work with the Legislature on the issue of Graduate Medical Education.  Front left: Chris Wright, Armando Elizondo, Harrison Scofield and Andrew Coskey.

Four UTMB students returned to the Capitol for further work with the Legislature on the issue of Graduate Medical Education. Front left: Chris Wright, Armando Elizondo, Harrison Scofield and Andrew Coskey.

Senator Charles Schwertner took time for a photo with TMA-AMA student leadership. Senator Schwertner and his wife are both UTMB SOM graduates; he remains in the active practice of orthopaedics in Georgetown, Texas. They have three sons.

Senator Charles Schwertner took time for a photo with TMA-AMA student leadership. Senator Schwertner and his wife are both UTMB SOM graduates; he remains in the active practice of orthopaedics in Georgetown, Texas. They have three sons.

I have always liked Senator Schwertner’s office!  He tells it like a true Texan.

I have always liked Senator Schwertner’s office! He tells it like a true Texan.

This painting from Rep. Donna Howard’s office reminds me of my aunts Jewell, Jimmie, Verna and Ruth.

This painting from Rep. Donna Howard’s office reminds me of my aunts Jewell, Jimmie, Verna and Ruth.

There are many occasions for citizens to express their opinions.  There are usually interest groups out daily on specific issues.  This group sought to bring attention to the funding of living centers for the developmentally disabled.

There are many occasions for citizens to express their opinions. There are usually interest groups out daily on specific issues. This group sought to bring attention to the funding of living centers for the developmentally disabled.

Others sought to bring attention to the need to increase health services for women.

Others sought to bring attention to the need to increase health services for women.

UTMB students with Dr. Greg Bonnen, State Representative from Friendswood and UTMB alum.

UTMB students with Dr. Greg Bonnen, State Representative from Friendswood and UTMB alum.

Students with Rep. Wayne Faircloth, who lives on Galveston Island and represents UTMB.

Students with Rep. Wayne Faircloth, who lives on Galveston Island and represents UTMB.

State government employees marched on the Capitol to emphasize their desire for salary increases.

State government employees marched on the Capitol to emphasize their desire for salary increases.

A very vocal group drew support from Rep. Sylvester Turner regarding continued funding for therapy services to children and disabled individuals.

A very vocal group drew support from Rep. Sylvester Turner regarding continued funding for therapy services to children and disabled individuals.

“No cuts” seemed to be a pretty consistent theme for every group this session.  With the proverbial overabundance of monies in the state’s treasury, many advocacy groups—especially those in education and health care—could not understand the parsimonious allocations to services in those underfunded areas.

“No cuts” seemed to be a pretty consistent theme for every group this session. With the proverbial overabundance of monies in the state’s treasury, many advocacy groups—especially those in education and health care—could not understand the parsimonious allocations to services in those underfunded areas.

Senator Kel Seliger and Chief of Staff for Education Mark Kavanaugh ponder the Senate’s allocations to the education budget.

Senator Kel Seliger and Chief of Staff for Education Mark Kavanaugh ponder the Senate’s allocations to the education budget.

Senators Nichols, Hinojosa and Nelson listen to testimony as they knit together the Senate’s budget proposal.  The House and Senate budgets were about the same in numbers but vastly different in their methodology of financing.  A Conference Committee is tasked with resolving those differences and producing a budget that can be endorsed by both chambers and signed by the Governor.

Senators Nichols, Hinojosa and Nelson listen to testimony as they knit together the Senate’s budget proposal. The House and Senate budgets were about the same in numbers but vastly different in their methodology of financing. A Conference Committee is tasked with resolving those differences and producing a budget that can be endorsed by both chambers and signed by the Governor.

Senator Larry Taylor (seated, far right of photo), who represents Galveston County, served as chair of the Senate Education Committee and also chaired the Senate’s Budget Committee.

Senator Larry Taylor (seated, far right of photo), who represents Galveston County, served as chair of the Senate Education Committee and also chaired the Senate’s Budget Committee.

Senator Schwertner, flanked by Lt. Governor Dan Patrick and Senators Donna Howard and Lois Kolkhorst, held a press conference related to health care proposals for the state.

Senator Schwertner, flanked by Lt. Governor Dan Patrick and Senators Donna Howard and Lois Kolkhorst, held a press conference related to health care proposals for the state.

This T-shirt covers about all the social issues that find their way to the Capitol steps and into the chambers.

This T-shirt covers about all the social issues that find their way to the Capitol steps and into the chambers.

Lauren Sheer working with Dr. Maureen Milligan, Executive Director of Teaching Hospitals of Texas (THOT), who assists us with issues both state and federal that impact medical education, Medicare, CHIP, Medicare and hospital regulatory issues.

Lauren Sheer working with Dr. Maureen Milligan, Executive Director of Teaching Hospitals of Texas (THOT), who assists us with issues both state and federal that impact medical education, Medicare, CHIP and hospital regulatory issues.

Bought this T-Shirt in front of the Capitol for my son-in-law!  Gotta keep my only granddaughter safe!

Bought this T-Shirt in front of the Capitol for my son-in-law! Gotta keep my only granddaughter safe!

Yes sir!  The Dean of the Senate, A.R. “Babe” Schwartz himself, is still as quick as ever in giving new members a bit of advice; Babe is talking with Rep. Wayne Faircloth at a new members’ welcome reception.

Yes sir! The Dean of the Senate, A.R. “Babe” Schwartz himself, is still as quick as ever in giving new members a bit of advice; Babe is talking with Rep. Wayne Faircloth at a new members’ welcome reception.

King Hillier, Laura Smith and myself at a THOT meeting.

King Hillier, Laura Smith and myself at a THOT meeting.

Laura and Angie Hamouie, our UTMB Health Policy Elective student.

Laura and Angie Hamouie, our UTMB Health Policy Elective student.

Highlights of the session are always covered by Evan Smith from The Texas Tribune, shown here reviewing the state tax proposals with Speaker Pro Tempore Dennis Bonnen of Brazoria County.

Highlights of the session are always covered by Evan Smith from The Texas Tribune, shown here reviewing the state tax proposals with Speaker Pro Tempore Dennis Bonnen of Brazoria County.

Another demonstration focusing on the importance of graduation from high school or college for advancement of minority opportunity.

Another demonstration focusing on the importance of graduation from high school or college for advancement of minority opportunity.

Representatives Jeff Leach, Sarah Davis and and Pancho Navarez sort out the 84th Session for Evan Smith at Texas Tribune.

Representatives Jeff Leach, Sarah Davis and and Pancho Navarez sort out the 84th Session for Evan Smith at Texas Tribune.

L&L with Rep. John Raney’s very capable staff.

L&L with Rep. John Raney’s very capable staff.

Representative Faircloth’s staff; some of the best people in the entire state.  Wes Starnes, as Chief of Staff, manages a very responsive office.

Representative Faircloth’s staff; some of the best people in the entire state. Wes Starnes, as Chief of Staff, manages a very responsive office.

Representative Trent Ashby’s staff—a great group of folks who treat the public like their own relatives.

Representative Trent Ashby’s staff—a great group of folks who treat the public like their own relatives.

Rep. Fletcher argues his case for SB11, “Campus Carry.”

Rep. Fletcher argues his case for SB11, “Campus Carry.”

Rep. Sara Davis states her case on SB 11, requesting the exemption of health-related institutions regarding “campus carry.”

Rep. Sara Davis states her case on SB 11, requesting the exemption of health-related institutions regarding “Campus Carry.”

Working with Senator Taylor’s staff on multiple issues was always a pleasure.

Working with Senator Taylor’s staff on multiple issues was always a pleasure.

And the rains came!

And the rains came!

Some days were pretty foggy.

Some days were pretty foggy.

But the skies cleared, and so did our minds.

But the skies cleared, and so did our minds.

Is there really a pot of gold at the end of that rainbow?

Is there really a pot of gold at the end of that rainbow?

Our Governmental Relations colleagues.

Our Governmental Relations colleagues.

A Longhorn view of the Capitol.

A Longhorn view of the Capitol.

The End!

The End!

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140 Days and 140 Nights

Torrential rainfall wasn’t the only downpour in Austin this spring. The political analysts are all trying to enumerate the positives in this 84th Legislative Session. It was a watershed session for social issues, to be sure. And although there will be much talk about the expansive tax cuts passed out of the session and the really, really conservative FY16-17 budget ($209.432 billion compared to the total of $190.9 billion for FY14-15)—all of that comes at a huge cost to what many would have liked to have seen added to public education, community colleges, higher education and health care. There was no adjustment in Medicaid rates, so hospitals and physicians did not receive a boost in funding. So where did all the money go?

  • Almost $20 billion remains in the state treasury in case it is needed in the future.
  • A small amount of money went toward “tax relief,” which translates into a larger deduction in homestead exemptions for homeowners. People who don’t own a home will see no tax relief.
  • A total of $23.1 billion in funds from various programs went to the Texas Department of Transportation for the state’s highway network. Some would say that amount is still less than what’s needed to expand highways, get started on new construction, maintain existing roads, and acquire right of ways for new improvements.

In truth, the budget could probably have been wrapped up much earlier than the end of May, because there were no substantial changes from the one first released in April. Most of the time has been spent debating a myriad of social issues, especially in the waning days of the session. Those issues included everything from bills related to banning same-sex marriage to those tightening abortion restrictions. The most pressing issue for a while in the Legislature seemed to center on expanding the right to carry guns on college campuses in addition to the open carry of guns. Before the session was over, there was still hope among some members to pass a bill that guaranteed “constitutional carry”—meaning that one can carry a weapon without licensure or prior screening.

Passions about issues ran high throughout the session, and members seemed to become more stressed as the session wore on, probably even more so after the American Phoenix Foundation announced that it had accumulated over 800 hours of secretly filmed video and audiotapes of members’ private conversations and life in general. Then came long discussions about to what extent the public has a “right to know” about the private lives of elected officials. Many members approached the invasion of privacy without concern, noting that, “it all comes with the turf” and “if you aren’t doing anything that you would not want to read on the front page of the paper, then don’t worry about it.” Others became angrier over the questions and photographs and responded by likening the audio-video surveillance to stalking.

Tensions also flared even among members of the same party. The old admonition of “speak no evil about a fellow party member” seemed to evaporate as procedural gimmicks and tricks were used to kill fellow members’ bills. There was lots of gamesmanship in both parties. Rep. Jimmie Don Aycock, who had worked all session to produce a laudable funding plan for Texas’ public schools, sadly pulled down his landmark bill rather than clog up the House calendar after ranking Senate members made it clear that they would not take up the legislation even if the House passed it. Rep. Aycock announced his retirement from the House just days after the session’s end joining 12 other legislators who have also already resigned their posts.

As deadlines approached and members raced the clock to get bills heard before midnight, both parties seemed to zero in on a few specific bills, especially those related to guns and social issues. Frankly, the Democrats did not want to see them pass, and many Republicans did not want to have to vote on them and leave a track record for later scrutiny. So when the “chubbing” (slowing down) of legislation started with the proverbial inane questions and points of order being raised, it was almost a relief to many Republicans who were just as happy to not have to vote on some of the topics that lay before them.

Amid all of that background of intrigue and rhetoric, how did Texas’ institutions of higher education, UT System and UTMB, in particular, fare in this most recent exercise in democracy?

On a scale of 1 to 10, I would have to award achievement of UTMB’s outlined legislative goals at least a 9. And I would also applaud the executive leadership of the House, the Senate and the Governor’s Office for the excellent job they did of keeping the agenda focused and working diligently to resolve problems. That statement is measured with the numbers:

  • The Texas Senate voted 30 to 1 in favor of the budget
  • The Texas House voted 115 to 33 for the budget
  • The Comptroller certified the budget
  • The Governor signed the budget

So let’s look at UTMB’s objectives and our end results:

  • Increase in formula funding (the money designated for the education of each student enrolled)Formula funding was increased, with UTMB receiving an additional $10 million. UTMB has seen nearly a 40 percent increase in enrollment over the past 6 years, so this is a welcomed increase in funding. Nevertheless, the formula funding amount is still markedly less than that which was allocated in 2001.
  • Maintain current level of funding for UTMB Hospitals and Clinics—UTMB retained its $10 million addition from the 83rd Legislature. We were happy to maintain that amount, but would welcome the Legislature’s consideration of our request for mission-based funding for our health system, like that received by MD Anderson and UT Health Northeast in Tyler.
  • Exceptional Item funding—Although UTMB had requested funding for programs at the Galveston National Lab, research in vaccine development and research in regenerative medicine, the Legislature awarded UTMB $8.2 million to construct the state’s first (and only) BSL-4 Treatment Facility. Other funding from state sources will increase that overall amount to almost $14 million.
  • Funding for the construction of an Interprofessional Education Building—The Legislature was most generous to all higher education facilities in granting requested funding for one such building project at each institution. UTMB was awarded $67.8 million (the full amount requested) for the construction of a new Interprofessional Education Building. Total cost for the building will be about $90 million; the remaining funds for construction will come from philanthropic resources. The building will be sited on the west end of UTMB’s Galveston campus.
  • Correctional Health Care Operations—$84 million was allocated to the Texas Department of Criminal Justice for CMC operations as the Legislature recognized the current low cost provided by UTMB and Texas Tech ($9.40 per member per day) as well as the inflationary drivers such as offender aging, pharmacy costs and increases in costly chronic conditions among offenders.
  • Correctional Health Salary Adjustments—The Legislature allocated $60 million for CMC employee salary increases, marking the first adjustment for those employees in 4 years.
  • Correctional Health Supplemental Appropriation—The Legislature awarded TDCJ an additional $42 million to complete payments due to UTMB for the prior year’s services.
  • Graduate Medical Education funding—$60 million in new funding was added to the state’s GME programs. UTMB will receive funding increases based upon its addition of new residency slots and/or programs.

Other issues impacting UTMB and other institutions of higher education also passed out of Austin this session. Among them:

  1. The State Budget (HB 1) grew by only 3 percent over the current budget when adjusted for tax relief. It is “balanced” and left almost $20 billion in reserves.
  2. Supplemental Appropriations (HB 2) provides money to cover items in the prior two-year budget timeline that were under-funded. $768 million was placed into TRS-Care (the state’s teacher retirement health plan), and $800M was added to cover border security operations.
  3. General Revenue Dedicated Account Reform (HB 7) reduces the state’s reliance on GR dedicated funds for budget certification, increases budget transparency and ensures that fees are spent on intended purposes. In short, it does away with a host of “slush funds” and accounts with unexpended balances that have cluttered the accounting systems for years. Rep. Sarah Davis led this move to improve accountability and transparency.
  4. Open Carry, which was passed by both Houses and signed by the Governor, permits Texans with gun permits to carry their weapons openly in a holster.
  5. Campus Carry passed in spite of objections from UT System’s new Chancellor, Admiral Bill McRaven, and the objection of multiple university presidents, faculty and students. The bill calls for each university president to study the issue and develop a plan that accommodates students’ and employees’ right to carry; however, the plan may exclude certain areas of the campus and/or certain events. For instance, the Galveston National Lab is already excluded. UTMB will work under UT System guidance in developing the plan for its campuses.
  6. Trauma funding accounts with over $150 million in reserves will be paid to the state’s network of regional trauma centers in a move by Rep. Sarah Davis to improve state budget transparency by eliminating reserves from multiple state accounts. UTMB will benefit from these funds.
  7. Medicaid rates for physicians and hospitals were NOT adjusted during the session; therefore, inflationary costs in health care will have to be absorbed by providers of Medicaid services. Predictions are that more and more physicians will drop out of the already depleted ranks of those accepting Medicaid payments.
  8. Early Childhood Education did benefit through HB 4, signed by the Governor in late May 2015, which implements high-quality education standards for the Texas Pre-K programs. The Governor also signed SB 934, which provides training academies for public school teachers and enhances mathematics instruction and reading excellence programs in kindergarten.
  9. On May 31, 2015, the Governor also signed SB 632, which implements his higher education research emergency item by eliminating the Emerging Technology Fund and creating the Governor’s University Research Initiative. The fund will permit Texas universities to recruit prestigious, nationally recognized researchers to their faculty.
  10. Two bills provide the promised tax relief package: HB 1 increased the homestead exemption for school district property taxes from $15,000 to $25,000. HB 32 reduced the franchise tax on Texas businesses by 25 percent.
  11. State Contracting Reform (SB 20) strengthens contracting oversight across state government. After the revelation of contracting irregularities in the Health and Human Services Commission this year, the Legislature demanded that a better process be put in place for all state agencies.
  12. Health and Human Services Commission Sunset Review (SB 200) reorganized the five agencies related to health and human services by consolidating several into the overall Health and Human Services Commission umbrella and re-defining the role of the Department of State Health Services (SB 202).
  13. Public Education (HB 2804) redesigned the accountability system for evaluating school districts with the use of a straightforward “A” to “F” rating system.
  14. Mental Health funding received an increase of $150.7 million (not including Medicaid) for an overall designated $3.6 billion in all funds for behavioral health and substance abuse initiatives.
  15. Higher Education overall received a $391.5 million increase in funding for a total of $7.2 billion in general revenue funding and $1.3 in General Revenue Dedicated Funding for enrollment growth and formula increases. Community colleges were not included and therefore did not receive any increases in core operational funding.
  16. Tuition Revenue Bonds were approved for the first time since 2006 for the construction of new facilities on university campuses around the state.

Even as we reflect on the success of the 84th Legislative Session, we’re thinking ahead to January 2017 and the beginning of the 85th Legislature. During the coming “interim” year, we’ll continue to educate elected officials about UTMB and its mission and we’ll begin the important work of setting priorities for the next session.

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The Budget

Finally, the verdict is in on the conference committee report: Both chambers still have to vote on the budget, but the agreed-upon template from the committee members was released yesterday and more was revealed today. More details continue to dribble out in small amounts at a time; the decision-making continues to be a very fluid and iterative process. And remember that it’s not over ‘til it’s over. Items can be added that increase or decrease “final” decisions made so far, agreements can fall apart before the final legislative step, and then there are always the governor’s potential vetoes, which can occur up to 20 days after the end of session.

That said, as of today, here’s what the conference committee has done:

budget blogSo good news on the formula—although all universities and health-related institutions are still not up to the desired 2001 levels of funding, this increase is a step in the right direction.

We asked specifically to maintain our hospital base, and the Legislative Budget Board recommendations to the Legislature did just that. In turn, the Legislature did also.

With a 42 percent increase in enrollment and a scarcity of space for student group learning and study, the passage of funding for a new interprofessional educational building is a welcomed gift from the Legislature. Although House and Senate will conference on this issue, UTMB should receive a minimum of $59 million for the building and hopefully up to the $68 million amount recommended by the House.

Budgeteers have put more emphasis on formula funding and less on new or increased special item funding—few institutions received more than a small portion of their requests for special project funding; some received none. Conference awarded UTMB $8.2 million, which is designated for the construction of an infectious diseases treatment facility for UTMB Hospitals. In addition, Rep. Wayne Faircloth was instrumental in getting statutory language adopted that was necessary to allow the Health and Human Services Commission to distribute federal or other funds to UTMB for infectious disease treatment. Funding for TDCJ’s Correctional Managed Health Care program is directed to both Texas Tech and UTMB; UTMB receives about 80 percent of the funds because of the number of units operated and because UTMB treats those patients requiring higher acuity of care (i.e., hepatitis C, cancer, surgical cases and others). For operation of the units and medical, mental health and hospital acute care, the Legislature appropriated $84 million over the next biennium. This will bring funding in line with what is currently being spent in correctional health care, since there is a shortfall this biennium.

Although we had requested raises for correctional health care unit staff, the original recommendations from both House and Senate contained no designated funding for this area. Thankfully, as conference went forward, conferees championed that cause and their efforts resulted in an allocation of $60 million for staff salary increases over the biennium.

With funding issues moving toward closure, the House and Senate will work Saturday and Sunday to complete the packed calendar of bills awaiting passage or rejection before the stroke of midnight June 1.

Remember to go forth and do good—and to do it well!

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Good News on Tuition Revenue Bonds from the Hill

For the past decade, UTMB has been dreaming of a new building to house its educational programs—specifically, an interprofessional educational center that focuses on shared lab, learning and simulation programs to provide the most appropriate learning environment in which to train future care providers. That vision is one more step closer to reality with action taken by the Senate on Tuesday.

House Bill 100 had been approved by the House and sent to the Senate; the Senate had its own version of an omnibus facility construction bill that would permit the new construction and remodeling of educational/research buildings on campuses across the state. During the past two legislative sessions, similar proposals died a slow and painful death in the waning days of the legislative process. But this year, after a decade of drought in construction funding, the Senate agreed (in part) with the House, passed out its version of the construction funding bill, and sent it back to the House for conference.

Discussion regarding the construction of new facilities (and remodeling of outdated facilities) was heated, with almost everyone weighing in with their version of what should or should not be done. Senator Schwertner proposed an amendment that would have linked his proposal for a tuition increase cap to the building appropriation. Others, like Senators Kolkhorst and Ellis, proposed that tuition be re-regulated. Although the rhetoric was extensive, the bill ended up passing with only five Senators opposed: Birdwell, Burton, Hall, Huffines and Van Taylor. Senator Larry Taylor of Galveston County voted for the bill; he has also chaired the Senate Education Committee and served as a leading proponent for the investment in higher education space.

For UTMB the passage (and further tweaking of the bill by the conference committee) is quite meaningful. UTMB has had a 43 percent increase in student enrollment over the past four years. Since Hurricane Ike in 2008, enrollment has increased from 2,600 to over 3,200. This substantial growth (ranked 5th in the entire nation among universities) continues to tax facilities on our Galveston campus.

As UTMB wraps up construction of the new Jennie Sealy Hospital and the Clinical Services Wing, as well as final remodeling of the John Sealy Hospital, efforts will focus on the design of and fundraising for the new Interprofessional Educational Building. Tuition Revenue Bond funding from the state will be a huge help in building the new facility.

Tax Relief and Other Hot Items!

The House and Senate are still working out the mysterious “tax relief” measures; the Senate has wanted an increase in the homestead exemption, but the House has favored a sales tax reduction. A compromise will likely contain a homestead exemption decrease and a reduction in the business margins tax. We should know the favored formula within a few days.

Higher education formula funding is also scheduled for a 3 percent increase; details are imminent. The chambers also are sorting out the methodology for distributing special research funds for higher education institutions through the Texas Research University Fund (TRUF) for the flagships, the Texas Research Incentive Program (TRIP) and the newly proposed Governor’s University Research Initiative (GURI). So, among the TRUF, TRIP and GURI, the state’s research universities should see new sources of potential funding available to them. Proposed changes also would provide funds from the Texas Enterprise Fund (TEF) for a new category of university research commercialization awards. Next will come a proposal to end the acronyms in legislation!

On the Agenda

On Wednesday, the House will discuss Senate Bill 18, which proposes new Graduate Medical Education funding for the state. HB 3078 also will be heard; this bill addresses a uniform pre-nursing curriculum. HB 3348 does likewise, along with authorizing the Texas Higher Education Coordinating Board (THECB) to allow certain public junior colleges to offer baccalaureate degree programs (especially nursing).

With just a few days left in the 84th regular session, much remains to be done and much of it is of interest to UTMB and its mission. We’ll keep you posted as we learn more.

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Where Are We?

The timer on my iPhone says there are 13 days left in the 84th Session of the Texas Legislature before adjournment, or sine die! At midnight on the 140th day (June 1), Cinderella’s coach turns back into a pumpkin, the horses are white mice again, and the excitement of the royal ball and the search for a wife for the prince all end abruptly. Such are the waning days of the legislative session. Some parts of the story end happily; others, sadly. As in the storybook, Cinderella always wins in the end, and the wicked stepsisters get their just deserts when all is said and done. In politics, history will anoint who’s a Cinderella and who’s a stepsister.

As we face that stroke of midnight on June 1, what would an observer say about the players in this legislative session? The orchestra is led by two very competent and powerful conductors, the Speaker of the House and the Lt. Governor. There are 31 Senate players and a cast of 150 in the House. No one is a bit player. There have been some top performances delivered by newcomers to the scene; there have been some less-than-stellar moments that will, no doubt, be chronicled in statewide media, such as Texas Monthly and Texas Tribune. But with respect to UTMB:

Senator Larry Taylor has taken a lead role on numerous issues of great importance to the Gulf Coast—in particular UTMB—and for the state as a whole.

Representative Wayne Faircloth has gone where few have gone before; he can never be accused of being timid. Take a peek at his 10-minute debate (scroll down to the 4/09/15 archive and the debate begins at the 2hr 50min mark) with seasoned House member and soon-to-be candidate for Houston’s Mayor, Sylvester Turner. In an effort to eliminate funding restrictions for UTMB and Galveston County, Rep. Faircloth stood his ground and delivered a vote in favor of his position. He did the same with a key funding issue related to the establishment of a state infectious diseases treatment center (again at UTMB). In fact, that amendment sailed through so fast that leadership was left scurrying around wondering what happened.

And, Rep. Greg Bonnen took on his own brother (Dennis Bonnen, the House Speaker Pro Tempore) in a debate over water rights for Galveston County.

At 125 days into the session, the numbers tell a story! Look for yourself:

Day-125 Statistics—84th vs. 83rd Legislature (Regular Sessions)

blog chart crop

The House has passed out more bills than in the previous session, but the Senate has moved quite a bit slower. Friends of the Senate likely feel that their work has been of greater priority to the state—quality versus quantity. The House might not agree with that interpretation, citing that it has been more focused and that its leadership has been very effective in moving bills along at an aggressive pace. The Senate might argue that the House was slow to take up its bills on the House side; the House might argue the same against the Senate. But no matter how they get there, at the end of the day, both chambers will have to find a way to work together if significant legislation will make it into the public domain.

While budget and policy issues have languished, there has been a spirited debate on any number of social issues that has diverted time and attention. To name a few:

  1. Immigration reform similar to Governor Perry’s executive order from last December continues to move forward in the Legislature. At the same time, new reports from demographers for the state note that immigration from Latin American counties is at an all-time low in Texas and that immigration from Asian counties has increased by 42 percent.
  2. Last week, members from both chambers continued to grapple with settling their differences on tax cuts, restraints on local property tax increases, state ethics cases, border security, and the right to carry handguns.
  3. HB 4105 opposing same sex marriage continued its fight to live in the House.
  4. House Public Education Chairman Jimmie Don Aycock threw in the towel Thursday evening, giving up on his finely crafted education finance package of $3 billion after the Senate sent word that it would not act on the bill even if it passed in the House. The sentiment seems to be “let the courts decide.”
  5. The reintroduction of “deep fat fryers” and soda pop machines in public schools by Agriculture Commissioner Sid Miller touched off major controversy from proponents for healthier diets for kids. As you may recall, then-Agriculture Commissioner, later-Comptroller Susan Combs tossed those items out of schools a decade ago—in this pediatrician’s opinion, all the better for child nutrition!

And what about higher education?

Prospects look good for the passage of legislation to fund Tuition Revenue Bonds (UTMB’s TRB would help build a much-needed interprofessional education building) and for an increase in education formula funding. UTMB remains hopeful for an increase in base funding for the hospital and for TDCJ to receive increased funding for the Correctional Managed Care program that will include funding for employee salary increases. We continue to work with our agency partners to educate legislators about the importance of this funding.

All of those details have to be worked out in the next 13 days! If they aren’t, then I will become one of those grumpy pumpkins that terrorize the graveyards of dead bills.

Stay tuned!

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With a Little Help from Our Alumni

During a recent Development Board meeting at UTMB, a number of questions were asked about the status of UTMB’s funding requests from the state legislature. Obtaining access to new members of the legislature is always difficult. I commented that I really could use some help in getting an appointment to see our new Lt. Governor, Dan Patrick. Within an hour I had a call from Development Board member Michele Purgason, volunteering her time to help set up a meeting with Lt. Governor Patrick to discuss UTMB’s need for support related to our exceptional growth in recent years.

Michele is a UTMB School of Nursing graduate and has some great stories of her time as a cheerleader with the Houston Oilers. She married Tom Purgason, a graduate of UTMB’s School of Medicine. After his residency training, Tom and Michelle made their home in Arlington, Texas, where they built a highly respected internal medicine practice and raised their children. Their daughter Ashley is an alumna of UTMB’s Graduate School of Biomedical Sciences, where she was distinguished for her research in aerospace medicine as well as her service as a student member of the UT System Board of Regents.

Michele has been a trusted advisor and mentor for several successful candidates for elected office over the years. In her role as president of the Arlington Republican Women’s Club, she had met then-Senator Dan Patrick and kept in touch with him during his successful campaign for Lt. Governor.

When Michele called Lt. Governor Patrick’s office and asked for an appointment to discuss UTMB, her request was immediately granted. She called me, and said, “We have an appointment next Wednesday at 4:30! Can you be there?” We seized the opportunity.

Lt. Governor Patrick received us with great hospitality and revealed an extensive knowledge of UTMB’s research in infectious diseases, our safety net role in the delivery of regional trauma services and our role in health professions workforce development. We had the opportunity to expand his understanding regarding future potential threats in the area of emerging infectious diseases. We also discussed how UTMB’s requested research funding in this area, as well as hospital funding we’ve requested (similar to that provided to other state-owned hospitals), would benefit Texans.

We left the meeting feeling pleased that we had been able to state our case and be heard, and delighted to know that there are alumni like Tom, Michele and Ashley Purgason who daily look for ways to further our mission of improving health for the people of Texas and around the world.

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A Visit to the White House

In March, I had the opportunity to participate in a Government Relations Academy as a mentor for the America’s Essential Hospitals (AEH) group (formerly the National Association of Public Hospitals). Our UTMB executive vice president and Health System CEO Donna Sollenberger is on their Board of Directors. As a part of the Academy, we paid a visit to the office of Domestic Policy at the White House.

No, I did not get to meet with President Obama, nor the First Lady. On a prior visit I did get to greet the First Dog in the actual residence. He has his own security detail.

When people visit the “White House” for the purpose of providing information to policy analysts, that visit actually takes place in one of the many auxiliary buildings next to the residence. Security is still the same and consists of passing through multiple screenings contingent upon advance background checks and clearances. Our meeting was in the Eisenhower Building, which in itself is a beautiful piece of architecture.

Eisenhower Annex

Eisenhower Building

The meeting was productive in that we had the opportunity to discuss any subject that we wanted to with the domestic affairs staff. I had heard so many rumors about the imminent demise of the Medicaid 1115 Waiver that I asked the staff member if that was indeed true. He replied promptly that he had heard nothing of that issue, and responded that he would check into it.

He did ask me for a description of “how” the 1115 Waiver was making a difference in Texas. I provided him some specific examples of projects in our 1115 program that Craig Kovacevich and Katrina Lambrecht have so effectively administered, and I described the personal cases with which I was familiar: how lives were changed because of the expanded reach through education, disease management programs, telemedicine, hospital readmission reductions, and the learning collaborative that enables program leadership to share best practices.

As we left the meeting, staff asked for my card. As I handed it to him, he said, “I would like to talk more about the 1115.” Thinking this was a formality, I doubted that I would ever hear back from him. So I was quite shocked when I got a call from Bruce Siegel, president and CEO of AEH, that Domestic Policy Council staffer Tim Gronniger wanted to meet and finish the conversation we had started related to the 1115 Waiver.

Tim and AEH staff

Mr. Gronniger and AEH staff

Bruce is very strategic policy expert. He immediately seized the opportunity to invite me to attend meeting #2 with Tim and his staff, along with Dr. Mitch Katz, representing the Los Angeles 1115 Waiver program, and LaRay Brown, senior vice president of the New York City Health and Hospital Corporation.

Craig and Katrina provided me with a comprehensive list of our outstanding 1115 Waiver projects, and Dr. Maureen Milligan, president and CEO of Teaching Hospitals of Texas, put out a request on my behalf to regional anchors for the waiver all over the state of Texas to send examples of their favorite projects. I had an abundance of information to sift through for the April 29 meeting in DC.

On Tuesday evening, I flew to Washington and joined Bruce and his colleagues for breakfast to plan the meeting with Tim Gronniger at the White House. We walked over to the White House gates after numerous detours because of increased security procedures. Finally, we worked our way through the multiple checkpoints and found our way to the Domestic Policy conference room on the third floor of the Eisenhower Building.

Bruce made the introductions and we immediately plunged into our personal explanations of “why” the 1115 Waiver has played such an important role in the transformation of health care and the improvement in access and quality in America’s health care marketplace. Since every minute counts in meetings like this, there was no small talk or comments on the beautiful Washington weather. We immediately got down to business.

My colleague from L.A. described the tremendous impact the 1115 Waiver has had on the improvements to access to care in their entire hospital and clinic system and the marked decrease in readmissions they’ve seen for patients with chronic health problems. He addressed their improved ability to address those social determinants of health that impact patients and their families, such as food security, housing, transportation, prescription medicine access and health wellness education.

My turn came to describe Texas’ and UTMB’s programs. I sensed Tim’s desire to hear more about the individual impact to patients and evidence of real transformation in the system.

I told him the story of Tyler County Hospital in Woodville, Texas, and its DSRIP (Delivery System Reform Incentive Payment) project designed to improve patient satisfaction, value-based purchasing and access to “after hours” care. I also told him of my firsthand knowledge of that hospital, having been born there six decades ago. I described the impoverished “eastern border” of Texas, which is home to a diverse population with high incidence of chronic disease, premature death, serious mental health disorders, food and housing insecurity, unemployment and overall lack of access to health care.

I told him about Dr. Wright, the CEO and administrator of Tyler County Hospital, and her passion to improve access to care and patient satisfaction. I shared the success of her efforts and the fact that she had just informed us that the hospital had receive a 5 Star rating from CMS (the highest ranking obtainable) as a result of their 1115 improvement efforts. I described the pride in the hospital’s staff that led them (on their own time) to repaint and decorate the hospital cafeteria and break areas for staff and families of patients.

I also shared the multiple improvements that have occurred in the delivery of mental health services in the entire 16-county Region 2, for which UTMB is the anchor. Improvements have included the Burke Center’s collaboration with law enforcement, outpatient providers, supportive housing options and comprehensive care clinics.

Other innovative programs resulting from the 1115 Waiver include the use of Community Health Workers and their inclusion now in Texas as certified health profession workers, as well as the collaborative work among the Texas Medical Board, Health and Human Services Commission, UTMB and the DEA to ensure access to prescription medication for behavioral health patients in underserved areas and delivery of psychiatric services to children.

LaRay Brown provided an overview of the challenges faced in the New York City health department and the challenges facing access to services. In spite of East Texas and NYC being polar opposites in many respects, both share many of the same barriers to health care access, food insecurity, housing issues and other social determinants that diminish the wellness of the community.

At the conclusion of our session, I played a two-minute video of the work done to open a cancer treatment center in Childress, Texas, with partners from Texas Tech—demonstrating the power of the 1115 Waiver to bring about transformations in health care that would not have occurred without that startup funding and technical support. This powerful video brought home the message of transformation for remote cities across our state.

Now it is wait-and-see time. Will our visit and talks make a difference? Who knows? We can only hope that the power of those personal accounts and glimpses into the impact zone of health care transformation will make a difference. Meanwhile, visionary people like Donna Sollenberger, Katrina Lambrecht and Craig Kovacevich will continue the battle for improved health on the front lines, both in Galveston and in rural Texas.

I boarded a plane at DC’s Reagan Airport a couple of hours later and headed back to Austin, where another messaging battle is raging. What will the state legislature do to improve access to health care for those individuals in Texas who remain uninsured and without adequate access to health care? It is all too easy to stereotype the disenfranchised as lacking personal accountability or being irresponsible, but in truth most of our state’s uninsured are working people who simply make too little money to afford the high cost of health insurance.

In the end, all of us pay for that care through higher insurance premiums so that hospitals can shift costs and recover their losses on the delivery of care to the uninsured. This has been an age-old problem in health care. In truth, it is a hidden tax on every American and every American business that provides health care benefits for its employees.

As Texas continues to seek solutions to the crisis facing health care in the state—or the lack thereof for significant parts of our population—we must come to grips with how to ensure access to care for vulnerable populations. Like it or not, the costs are greater when we do nothing because of the negative impact on our state’s future productivity. Pay now or pay (more) later! Never a good choice!

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A Discussion on Telemedicine

I recently had the pleasure of participating in a panel discussion on telemedicine during the Texas Tribune’s Symposium on Health Care.

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A Special Update for TDCJ Correctional Managed Care Employees + A Reminder for All University Employees

There have been many specific questions related to the status of the CMC budget.

Remember your civics and Texas government course? (Of course you do; you took it in the 7th grade.) The House and the Senate each produce a budget. Those budgets are put together for the next two years of operations of each state agency. Sometimes the House and Senate budgets look alike, but sometimes they look very, very different. This is the normal ebb and flow in the process.

This year, each budget looks vastly different from the other one. TDCJ and CMC budget items are allocated to Article V, having to do with criminal justice, prisons, the Department of Public Safety, and the like. This Article fared no better than others in each chamber, with marked differences in the overall as well as the specific allocations to budget items. Overall, it looks like this going to be a topic of serious consideration for the to-be-named conference committee. (See my April 20 blog post for more information on the conference committee process.) In past sessions, CMC has usually been discussed in more detail during Conference Committee.

Correctional Health Care LAR HB 1 Comparison

cmc chart blog

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senate cmc

So what does this mean? The House of Representatives put $84.9 million into its budget for CMC, but put it all into the first area designated for health care services (hospital and clinics). This amount covers the shortfall from the past biennium in building the next two-year budget and also allocates resources for predicted growth in costs related to like pharmaceuticals and treatment of elderly patients with chronic diseases.

The House did NOT allocate any monies for capital equipment, expansion of services (building back staff to 24/7 operations in selected sites) or for employee salaries increases. Rather, Representatives put these items into Article XI, the “wish list” Article. This means that they did not provide funding for the items, but they did leave the discussion open in the Conference Committee.

The Senate provided less money for the CMC enterprise than did the House: $50.5 million to be exact. Senators put $20 million into continuing operations of health care services, which creates quite a substantial shortfall for the next two years. The Senate made no provisions for pay raises in Article XI. They did fund the entire amount requested for capital and for expanded operations.

As you can see, the proposed budgets are vastly difference. So how does this get resolved? In Conference Committee.

What does that mean? The House and Senate leadership (the Speaker of the House and the Lt. Governor, respectively) will each appoint five members to a Conference Committee to meet and go through the budget article by article. They are called upon to reach a compromise that is acceptable to each chamber of the Legislature. For CMC in Article V, the Conference Committee will have to evaluate the money allocated in the budget for the program and decide how to spend those funds for the coming two years. Members could decide to “find the money” for employee raises, for capital, and/or for expansion of services. Sending this work to Conference Committee also means there is another step in the process, and funding decisions regarding correctional health care have not been finalized.

In “finding the money,” the Conference Committee has the option of adding more money to the allocation or subtracting funds from it. (It works both ways!) If the House or the Senate members have a compelling reason to add or subtract funds, they could do so in creating a final budget for each house to approve. And of course, that final budget would have to be acceptable to the Governor in order to obtain his signature and pass to become law.

We, along with leadership from the partner agencies, have been meeting with legislators and their staff throughout this session regarding the importance of all these CMC items, and in particular salary increases. We will continue to work with the Legislature on funding for CMC during the conference process. Nothing is “over” until the final gavel.

Now for the reminder: Many people working in CMC and other parts of the university have asked us about contacting their local elected officials regarding their thoughts and concerns about the budget and other matters. Expressing one’s opinion to elected officials is every American’s right, but for both state and federal employees, contact with officials must be done in the proper manner in order to comply with state and federal law.

Employees cannot make contact with Legislators on state time, or using state resources like telephones, computers, printers, email addresses, or paper and stamps. And no employee may speak as a representative of UTMB unless specifically invited to do so by university leadership. But all employees are free to contact a federal or state official to express opinions about any matter on their own time, using their own resources, and speaking on behalf of themselves as individuals. The state has created the following web site to help members of the public learn more about the Legislature, legislation under consideration and representatives for each district: www.capitol.state.tx.us.

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A Twisted Path into the Disenchanted Forest

AKA: Leave a trail of bread crumbs so you can find your way back to reality!

Politics are not going “as usual” in Austin this session. There are lots of twists, turns, switchbacks, and trap doors on the journey to Oz. We have been doing a lot of visits with members and office staff these past few days, trying to get a sense of where they are heading. The answer is more often than not, “Beats me! We are on divergent paths.”

Hopefully the paths will converge before all is said and done. The House voted out its budget a few weeks back, and its version of formula funding, hospital base funding and inter-professional education building TRB ($67.8 million) were as expected for UTMB. There is also a more generous addition to the CMC base of ($84 million), but not for capital improvements at the units, staff raises or expansion of services.

The Senate version of the budget is not as good for UTMB since it has less for our TRB request ($59 million) and much less for CMC ($54 million, which includes base, capital and expansion of services, but nothing for employee raises).

So both budgets will head to Conference Committee. Members will be named at a future date, but we can guess from the Senate side that it will include Chairman Nelson and Vice Chair Hinojosa, and most likely Senators Schwertner (Health and Human Services Committee) and Huffman (State Affairs), and perhaps Taylor (Education). From the House will be Appropriations Chairman Otto and Vice Chair Sylvester Turner, and maybe three of the following Representatives: Zerwas, Ashby, Price, Crownover, Sarah Davis or another. These 10 individuals from both chambers of the Texas Legislature will have the onerous task of reconciling their budgets into one document that can be supported by Senate, House and Governor.

Conference committee members will take all Articles of the budget and review them one by one, comparing where each chamber is on the issues and trying to find common ground. That process usually works. But, this time the chambers have pretty wide disparities in the items they feel are priorities and worthy of funding, so it is not just a matter of finances but also of ideology. That ideological split within the majority party could potentially be used by the minority party to leverage a few items on their priority list. We will have to be patient and wait to see where it all ends up!

At present, it is fair to say that the House and Senate budgets are miles apart in regards to their budget priorities, and there is serious skepticism from major leaders that they will be able to reconcile those differences during the scheduled session (ending May 31). Many staffers have cancelled vacation plans and members are extending rentals in Austin preparing for the worst-case scenario — a Special Session during June.

It could be a long hot summer! The voice from the Governor’s Mansion has been pretty quiet, unlike that of former Governor Perry, who frequently nudged the Legislature in the direction he wanted it to go. It has been Governor Abbott’s style to leave the Legislature to do its job; after all, he has given them clear instructions in his initial address and the Governor’s recommended budget. The Governor is likely waiting like the rest of us to get a damage estimate from the conference committee and go from there with some more “instructions” about what he will or will not sign related to the budget.

In addition, both houses disagree on the promised tax cut proposals, with the Senate wanting a property tax cut and a decrease in franchise taxes on businesses and the House wanting to reduce sales tax and increase homestead exemptions without a tax cut on property. Right now there are no real words of compromise but lots of shouting at each other through the media. I would predict that will continue for a few more weeks, with the rhetoric becoming increasingly impassioned from both chambers.

The gun bill literally misfired this week when Rep. Trey Martinez Fisher raised a point of order as it came to the House floor. The point of order — a violation of committee rules in which the record of testimony was filled with errors related to persons testifying for and against the bill — was sustained and the bill was sent back to the committee to be “fixed” (we hear they have brought in a gunsmith to work on it). It will make its way back to the floor for reconsideration, where it will likely pass. Although most of the state’s universities (except A&M) have gone on record opposing the right to carry on university campuses, the Legislature’s love affair with guns has not waned. Over 50% of the House members are already co-sponsors of the bill.

As you know, many consider the right to bear arms a birth right, and it can be a Republican “litmus test” (like opposition to abortion) for the truly conservative members. One mis-vote on such “litmus test” issues can result in the member not getting re-elected in the future. So, it is going to be a hard sell to find members willing to move against the party line and vote common sense on the guns-on-campus issue. After all university campuses are filled with young adults with immature neurological systems frequently exposed to and inexperienced with alcohol; that combined with gunpowder in many minds is a recipe for disaster. And, one must also be somewhat concerned about the wisdom of allowing anyone to carry weapons in hospitals, clinics or mental health facilities.

We do have an acceptable amendment excluding the GNL from campus carry; it should move ahead unimpeded. The NRA actually looked it over and stamped their seal of approval on it! There will certainly be efforts in the House to amend the bill to provide a safe environment on college campuses, in courts of law, health clinics and hospitals, and other places of public assembly and sometimes high emotion.

Emotional testimony seems to be trumping scientific facts, studies, reason and even common sense in hearings. A bill requiring all athletes to have an EKG (and maybe a cardiac ultrasound) as routine pre-participation screening for sports in the 9th and again in the 11th grade is sailing through the House unimpeded. This is in spite of testimony from the Texas Pediatric Society and children’s cardiologists citing that the testing is too costly and would impact too few kids. Economic issues on this specific topic are ignored despite the expert testimony. It reminds me of the misguided recommendation to screen all athletes for steroid abuse that was later repealed. We have a lot of legislators providing guidelines for medical practice at the moment without a careful review of the scientific literature.

On another front, the Texas Medical Board (TMB) issued its guidance related to telemedicine practice. Dr. Alex Vo of UTMB has been a godsend in providing advice and recommendations to the board. He has created a great positive relationship with Executive Director Mari Robinson of the TMB, who values his guidance and expertise. The board rules will not impair UTMB’s current telemedicine practice. According to one’s viewpoint, the rules may actually improve our access and ability to offer patients improved access. Mari Robinson is also helping us with DEA-related issues by assisting with the request to include MHMR clinics as accepted telemedicine sites. One of my recent blog posts covers this subject.

Graduate medical education recommendations will also be a major part of the conference process since both House and Senate have placed money in the budget for this program, but not exactly the same allocation of resources. This will be a matter of discussion also for future resolution.

On a different subject, the Senate did vote out Senate Bill 200 by Jane Nelson to partially consolidate the state’s massive health and human services system. The original intent was to consolidate the entire effort into a single multipurpose conglomerate to improve efficiency, lower operational costs and provide better services to clients. However, those intentions got sidelined due to the controversy surrounding the outsourcing and contracting of services to external vendors by the Health and Human Services Commission (HHSC).

Instead of proceeding with the anticipate consolidation of the existing five state agencies, the Senate has recommended that HHSC (which administers Medicaid programs and oversees the other four agencies) merge with the Department of Aging and Disability Services (DADS) and the Department of Assistive and Rehabilitative Services to form one agency next year. The other two agencies — the Department of State Health Services (which oversees public health as well as mental health services) and the Department of Family and Protective Services (which manages children and adult protective services) — would be added to the mix in the future. The timing of the merger would be determined by a committee of four Senators, four House members and three public citizens.

Audits of HHSC by both the Governor’s Office and the State Auditor brought public attention to serious lapses in the handling of private contracts. It was apparent that the contracting processes had not followed usual state protocols to ensure competitive bidding. Those issues and some “perks” provided to HHSC staff became lightning rods for the media. An FBI investigation continues to look at the contract irregularities, and several senior staff members associated with these alleged errant activities have resigned.

Executive Commissioner Dr. Kyle Janek remains the head of the massive HHSC agency, which boasts 54,000 employees and a budget in excess of $34 billion. The Texas Tribune quoted Governor Greg Abbott on April 15, 2015, as saying, “It is now clearer than ever that the Texas HHSC has been riddled with operational, managerial, structural and procedural problems that go far beyond any individual or contract. That is unacceptable.” Anyone interested in public health in Texas will want to keep an eye on how things go for HHSC.

Big agenda items in the next few weeks include a resurrection of “the Right to Open Carry” bills and the appointment of a conference committee to iron out the wrinkles in the budget. Of course, there will also be a host of other bills hitting the floor of the House and Senate.

Be on the lookout for the dire wolf in our own version of “Game of Thrones.” You never know what will fall to the sword next.

Stay tuned for “Sights to Behold.”

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Telemedicine Rules Handed Down by Texas Medical Board

The Texas Medical Board (TMB) delivered on its promise of a new set of rules defining the do’s and dont’s for the practice of telemedicine.  The issue has been a highly charged one because the TMB has been in litigation with a private company related to the use of commercial telemedicine in the state.  The aforementioned company has much at stake, with over $15 million in annual revenues from their practice in Texas alone, where they have provided care for over 140,000 clients.

The primary controversy has been related to the physician-patient relationship.  The TMB has insisted that telemedicine services should be limited to patients with an established doctor-patient relationship through a face-to-face encounter.  The use of phone service consultations for the delivery of health care to a patient unknown to the treating physicians and the lack of ability to offer follow-up services to the patient have been points of concern to the medical board.

The company had the following to say in an April 10th article from the Houston Chronicle: “Unfortunately, the Texas Medical Board’s decision to adopt a new rule takes away Texans’ access to a safe, affordable and convenient health care option that many have depended upon for more than a decade.   As Texas’ population booms, health care expenses climb, and the shortage of primary care physicians grows, telehealth is a solution for patients dealing with common, non-emergency issues.  This rule change only serves to intensify these problems without providing any benefit to Texans.”

However in the same article, TMB President Dr. Michael Arambula is quoted as saying, “The rules represent the best balance of convenience and safety by ensuring quality health care for the citizens of Texas.  However, a telephone medicine scenario that allows a physician to treat an unknown patient without any objective diagnostic data and no ability to follow up with the patient sacrifices the patient’s safety for convenience.”

In testifying against the rule, Bill Hammond, CEO of the Texas Association of Business, said, “There’s no question whatsoever that this is about doctors protecting other doctors’ income.  It’s about dollars.  It’s not about better health care.  This regulation would be a death knell for telehealth.”

But on closer inspection, the policy may not be as bad as some would portray it. It in fact does expand access to telehealth technology to a greater audience.  At the crux of the argument are massive amounts of misinformation confounded by generational and knowledge gaps in understanding the application of teletechnology.  Many of the opponents to the expansion of telemedicine services largely base their argument on their perception that the quality of services is inferior to traditional office visits and see problems with the lack of an established doctor-patient relationship.

On the other side, proponents of the expanded use of telemedicine feel like traditional physicians are trying to protect their geographic turf and insulate their patients from intrusion of specialists.  These individuals also see the benefits of the use of telemedicine’ including improved in quality of services, improved access, and decreased patient costs.

This week has also been “telemedicine bill week” at the Capitol.  Multiple bills have been heard in the House Public Health Committee related to expansion of telemedicine services as the technology continues to be recognized for its potential to deliver health care and mental health services to hard-to-reach parts of the state in both an effective and cost-efficient manner.

Working in collaboration with the Office of Health Policy & Legislative Affairs, UTMB’s Dr. Alexander Vo, Vice President, Telemedicine and Health Services Technology, has created an effective working relationship with the TMB, the Health and Human Services Commission, and members of the Legislature regarding the expanding frontiers of telemedicine and health population management.  Dr. Vo’s pioneering work in the area of telemonitoring in the management of population health is positioning UTMB to become more aligned with government programs that base reimbursement on improvement of patient health outcomes.

To reconcile the misunderstandings associated with the media’s reporting of the TMB’s actions this past week, the board put out the following press release.

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On the Eastern Front: Washington may be undergoing a thaw!

We always have to keep one eye on Austin and the other one on Washington.  This week, while the Texas Senate has been passing out a state budget that is vastly different from that passed out of the House several weeks back, the US Congress has also been at work – of sorts, considering that the Senate went on a two week vacation after the House had passed out the legislation.

Three weeks ago, the US House of Representatives took up the Sustainable Growth Rate (SGR) issue related to Medicare reimbursements.  For the past 12 years, that issue has evaded resolution by the US Congress.  In fact, the Congress has put 17 temporary Band-Aids on the issue, passing just-in-time stop-gap measures to keep the Medicare program and physician reimbursements on-line.  This time, failure to resolve the issue would have resulted in a 21 percent reduction in reimbursements to physicians serving Medicare patients.

To the surprise of many political pundits, Speaker John Boehner and Democratic leader Nancy Pelosi worked out a bipartisan plan that passed the House 392 to 37.  That plan creates a new “Merit-Based Incentive Payment System,” along with other alternative payment models that focuses on quality, value and accountability in the Medicare payment system. Over a five-year period, this system will replace the old volume-based payment program (i.e., payment for number of services performed) for one that focuses on rewarding physicians for improved quality of care and better patient outcomes.  More care management will be emphasized in the new payment system.

The new plan throws out the old Medicare physician payment rates, which were set through a formula based on economic growth (the SGR) and replaces it with a half-percent increase in each of the next five transition years as the system moves toward a value-based reimbursement methodology.  Financial rewards would prioritize physician use of the “patient-centered medical home,” chronic care management, better care coordination models, and use of data leading to quality improvement and transparency.

After their holiday, the US Senate on April 14 passed HR 2, the Medicare Access and CHIP Reauthorization Act of 2015 by a vote of 92 to 8. The act repeals the SGR formula and reframes Medicare reimbursement to incentivize quality.  On an almost unrelated subject but one of interest to those of us in health care, the bill also included a two-year extension of funding for the Children’s Health Insurance Program (CHIP).

In addition to addressing the Medicare payment issue – which has dragged on for over a decade, leaving patients and physicians uncertain about the future of the Medicare system – the reauthorization act also includes other items of benefit for physicians:

  • The current Medicare quality reporting programs will be streamlined and simplified into a merit-based incentive payment (MIPS) which will reduce the aggregate level of financial penalties physicians could have faced.
  • The legislation protects physicians so medical liability cases cannot use Medicare quality program standards and measures as a “standard” or “duty of care.”
  • The system will include incentive payments for physicians who participate in alternative payment models and meet certain benchmarks and thresholds established in those models.
  • Smaller medical practices will receive technical support to participate in alternative payment models or the new fee-for-service incentive program.

The legislative package sets up two tracks for physicians to receive payments:

  1. Track 1 would essentially maintain the status quo.
  2. Track 2 would allow doctors to place patients into a risk-based payment model which would qualify them for the alternative payment track and receive higher reimbursements starting in 2019.

It also provides:

  • Extension of CHIP funding by two years
  • The allocation of $7.2 billion in additional funding for community health centers
  • A six-month delay in enforcement of the CMS “two midnight” payment policy for short hospital stays where hospitals get paid on an outpatient basis if the patient’s stay doesn’t span two midnights in the hospital

Senator Orin Hatch described the final passage of the SGR reform as a “monumental achievement.”

All 8 votes against the SGR reform came from Republicans who favored paying for the cost of the bill by other budget reductions.  Among the “no” votes were Senators Ted Cruz and Marco Rubio; Rand Paul voted for it.

The legislation’s passage allows each party to “spin” the win their own way.  For Democrats, its passage marks the addition of funds for children and the poor; for Republicans, the bill introduces new models of payment that pave the way for quality improvement and cost reductions in the Medicare system.

Has Congress found a new way to work together?  One could only hope so!

The legislation now passes to the White House for President Obama’s signature, which is anticipated to take place with plenty of ceremony in the next few days.

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A Change of Season – And So Much More

For the 84th Session, January and February were spent congratulating other legislators; introducing constituents, friends, clubs and organizations visiting “your Capitol”; jockeying for committee appointments; and the usual meets, greets and speeches. Lots of fanfare and love during those first two months!

March is supposedly the windy month or so my Mama said—and it was! The winds of change blew gale force through the Capitol as subcommittees and committees were appointed, with lots of new faces and the work of formulating a budget taking place against a backdrop of continuing accolades on the House and Senate floors each day for visiting groups from back home and special delegations from everywhere. The Capitol was teeming with people like an ant hill preparing for its queen. Committee members arrived early and worked until late at night, building a budget in each house. Overall, they did a pretty darn good job with the instructions provided by leadership.

As discussed in the last Ben’s Blog, the House and Senate have done their jobs to create a suitable budget. So what could go wrong?

Well, is the glass half empty or half full? Depends upon your viewpoint, doesn’t it?

Some will likely say that there is not enough money to fund the proposed budget, even though the budget is $2 billion below the state’s spending cap and it would leave $21 billion left in unexpended funds and the Rainy Day Fund. Some will gaze into a crystal ball, note that oil prices have decreased, and brace themselves for a “worst case” scenario. They will desire to preserve fiscal resources and at the same time push for increased tax cuts, especially on businesses (a Franchise Tax reduction) and personal property (which could total as much as $250 a year for the average homeowner). Budget cuts and tax cuts will be touted as necessary to stimulate an anticipated sluggish economy.

Still others will cite the dynamic Texas economy that not only survived the national recession but THRIVED in spite of it. They will note the marked increase in jobs in Texas and the increased number of taxpaying residents in the state. They will note that expanding populations must have more in the way of state services, especially public and higher education, transportation, public safety, access to health care, and all the other government-related services that go along with that thriving economy. They will see the glass is “half full” and needing to be topped off with additional resources that ensure the continued success of Texas and Texans.

One group sees opportunity and welcomes change; the other sees threats on the horizon and seeks to preserve the status quo. It is from these ends of the spectrum that our Legislature must negotiate a final budget in a conference committee composed of members from the House and Senate.

I’ll write more about that process in a future post, but in general, the conference committee must take into account a number of critical needs as they negotiate the state’s final budget for FY2016 and FY2017. Among the issues our Legislature must consider:

Increasing Cost of Health Care—The marked increase in the cost of health care is not a pretty picture, any way you view it. More and more hospitals are facing closure. Although that has been especially true for small rural and community hospitals, many of the larger urban safety-net hospitals are now dealing with severe shortages in revenues. Why?

Patients who were able to purchase health insurance through the federal Affordable Care Act (ACA) are availing themselves of nearby for-profit hospitals. Since Texas elected not to expand Medicaid, the safety net hospitals are still the primary source of care for the uninsured. And that is something that Texas still has in abundance. The demand there has outstripped the ability of the usual array of safety net hospitals to meet the needs of their patients. Both Harris Health (the Harris County Hospital District) and Parkland Hospital just posted the poorest financial performances they have experienced in years.

Just how bad is it? There is talk of downgrading Ben Taub’s Level 1 Trauma Center to a Level 3 facility, because they do not have the space and/or physician support to continue to be a full-service Level 1 Trauma Center.

Such a change would have a huge, negative impact on the Southeast Texas region. We currently have three trauma centers, two available by air ambulance. If the third (Ben Taub) closes, then that leaves only Memorial Hermann in Houston and UTMB on the island to cover the needs of more than 7 million people in an 18-county area. A downgrade in Ben Taub’s trauma center status could trigger a true medical emergency in the area. Sheer growth of population is already stressing trauma services. Without adequate access to Level 1 Trauma Services, major businesses will not relocate here, in turn stressing the economy of the whole region.

Increasing Cost of Health Care in Prisons—The state’s prison health care costs continue to go up every year in spite of both UTMB and Texas Tech health care providers using all the right tools—such as electronic health records, special pharmacy pricing, pharmaceutical reclamation programs, best-practice treatment protocols, strict utilization review, creative staffing, Six Sigma and other programs to ensure maximum efficiency. The fact is that the prison population is static but the number of offenders older than 55 years is increasing at rate of more than 10 percent every year. With the graying of the prison population come all of the diseases that accompany aging, such as diabetes, heart disease, lung disease, psychiatric illness, and cancer. And roughly 28 percent of the overall prison population has hepatitis C associated with past substance abuse. Providing a constitutionally appropriate level of care for patients with these costly chronic illnesses will become more challenging over time.

State retiree health care costs—As retired state employees enrolled in TRS and ERS live longer, they will consume greater amounts of health care resources. It will take at least $850 million to make the TRS fund “whole” and another similar amount to address ERS.

Transportation—Another major expense item facing the state is the diverse transportation needs driven by the thriving Texas economy. There is always a price to pay for success, and the roads, rails and ports that support Texas are all crying out for a piece of the financial pie! Harvesting Texas’ oil has proven to add to the wear and tear on Texas highways. Have you been on south I-35 to Laredo recently? One pothole leads to another bigger pothole. The same can be said for I-20 and I-10, and even the smaller Farm-to-Market roads from the 1960s are worn. Who knows when I-45 South from Houston to Galveston will ever be finished? The price for these major and evolving infrastructure needs is not small—a minimum of $5 billion and perhaps as much as $10 billion.

And lastly, EDUCATION—There seems little doubt that the issue of public school financing is far from resolved. The House has placed almost $3 billion into the budget in their effort to stave off future lawsuits on school finance. The irony of the present lawsuit is that many of the plaintiffs who found fault with the prior funding scheme have now become “wealthy” districts because of the oil and gas revenues being recovered in their tax districts. For this reason, their case may no longer have merit based on inadequate funding. It is anyone’s guess as to how the Supreme Court of Texas will rule on the school funding issue, but that decision will affect every man, woman and child throughout the state.

Higher education is still reeling from the devastating reductions in formula funding imposed on them in 2001. It has been a decade and a half and higher education is still feeling the impact of inadequate funding, including higher tuition for students (which amounts to a tax on students and parents); the financial freezing out of thousands of students who desire a college education but lack financial resources; and ultimately educational programming that fails to meet national and international standards, especially in the sciences, engineering, mathematics and technology.

For nearly a decade, universities have not enjoyed state support for the construction of new facilities, while student populations have doubled or tripled in many cases. I have been asked if we are using UTMB facilities to our maximum ability (like at night and on weekends). I reply “yes” and assure any doubters that seeing is believing. Resources to build new facilities on our university campus are a must this session, and failure to respond to the growing demand puts our historic education mission at risk. When I am asked if we are using technology, I reply “Yes.” But there is a limit to how many courses one can take online and still get a high-quality education in the health sciences. Some things are better learned in person. Organic chemistry lab at home in the kitchen usually does not turn out well!

For UTMB and our fellow academic medical centers, the “higher education” issue extends beyond graduation. Every city now wants its own medical school. Texas is a great and geographically diverse state, and it is good that we produce an adequate supply of physicians and other health care professionals. But the lack of graduate medical education (GME) programs means that many of the students we educate at Texas taxpayer expense have to seek GME opportunities in other states. About half of those Texas medical school graduates who leave the state for residency training will never return home to Texas to practice, whereas most of those who stay in Texas for their GME training end up practicing here. It is a pretty simple value proposition! If a state is going to retain the medical school graduates it has invested in already, it must provide an abundance of diverse GME slots to attract those students. The $60 million designated for additional GME funding is a great start, but it is a drop of water in a five-gallon bucket that clearly needs additional contributions.

As a leader in this nation, Texas must take an aggressive role in addressing the key success factors to ensure that it remains an economically attractive place for families to live and work. That means that we have to settle for nothing less than excellence in public education and that the higher education road is paved with a solid foundation to attract external students. Our health care system must be the best value in the nation, meaning that quality is high and cost is low. All of our citizens must enjoy access to health care if we are going to interrupt the cycles of costly chronic illness. We must be able to traverse our state safely and efficiently using air, rail and roadways. Our cities and neighborhoods must be safe and well-planned to support families from all walks of life.

How we spend our state’s resources is a real reflection of our state’s priorities. We must hold ourselves accountable for the right outcomes in our strategic budget planning. In Texas, we only get 140 days every two years to make these decisions. We need to get them right.

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Let the Budget Negotiations Begin!

The past month has flown by for us working the Austin legislative shift. The month has been filled with subcommittee meetings related to the construction of the state’s future biennial budgets for 2016-2017. As you may recall, the House Appropriations Committee and the Senate Finance Committee are charged with developing their own versions of the state budget. Each does that by appointing subcommittees for each “Article” in the state’s adopted budget.

Articles of particular interest to UTMB include Article II (Health and Human Services), Article III (both public and higher education), and Article V (public safety, including all matters related to, prisons, probation and correctional health care services). Other Articles also may impact UTMB interests, so we monitor them all, but Articles II, III and V are our chief focus.

Each subcommittee reviews the recommendations related to their budget section from the Legislative Budget Board (LBB) and hears testimony from heads of those affected agencies, schools and/or individuals. For instance, when hearing about offender health care, the subcommittee may concern itself with historical financial information from the LBB, priorities raised by TDCJ, as well as comment from the general public.

After deliberation (which this year was open to the public in House Appropriations’ process and for the most part closed to the public in Senate Finance’s), the subcommittee formulates its own recommendations related to the allocations that they are willing to commit to the budget. Those recommendations are then presented to the entire committee for review, consideration, change and eventual adoption. The adopted budget then moves to the floor of the House or the Senate for debate, review and adoption.

On Tuesday, March 31, the House’s version of the recommended budget HB-1 was debated on the floor of the House. It was quite a prime-time event, worthy of an Emmy nomination, but it would be hard to place in one category. Drama? Comedy? Reality TV?

The debate began at noon on Tuesday and concluded at 5 a.m. Wednesday. One could feel the drama as each section of the budget and the 350 attached amendments were reviewed. (That’s right—350 amendments!) The House in many cases had to vote on the amendment to the amendment to the amendment! During one section as a member proposed moving funding from AIDS education to abstinence education, the questioning became rather personal as related to the bill sponsor’s sexual history, i.e. “Hold old were you when you first had sex?” On the other hand, there were points of levity interspersed with times of passionate speeches about health care access, the needs of our veterans, the need to protect children, and the expansion of women’s health care services.

When all was said and done, the House voted to approve a $209.8 billion budget for the state’s next biennium, with a generous allocation to education. Even in their largesse, the House left untapped over $8 billion in the Rainy Day Fund and another $11 billion in unspent resources, for a total of more than $19 billion in available funds. The House could have added in another $2 billion to improve education, shore up TRS or address a myriad of other problems. But members chose not to do so, citing fears of economic recession in the future tied to declining oil prices (and decrease in tax revenue derived from oil and gas production).

So where does the House action leave UTMB?

Based upon our original priority list, here is where we are:

  1. Formula funding has increased over prior years as requested, but not as much as any of the academic or health-related institutions would have liked. We are still not back to the requested 2001 levels of funding before the steep reductions in that decade. The House increased formula funding by 3 percent over the filed bill.
  2.  Regarding our requested financing for a new interprofessional education building, the House approved Tuition Revenue Bond payment reimbursement that would permit UTMB to acquire $67.8 million in funding for the proposed $90 million student educational building. We had great support on that issue from Representatives Greg Bonnen and Wayne Faircloth, who both proved to be effective advocates for our need, based on our 42 percent growth in enrollment.
  3. Our hospital base was maintained as requested. The House placed all three of our special item requests and our request for an additional $11.3M for the hospital into Article XI, often referred to as the “Wish List.” They sit there with $34 billion (yes, with a “B”) other requests. We will work to have at least one of the requests float to the top during the budget conference time with the Senate.

Of special concern is the legislature’s lack of interest in considering our request for a special mission-specific formula for our hospital. The two other state- funded health-related institution hospitals are funded through a mission-specific formula that is considered along with the instruction formula, making a biennial increase to their hospital’s base funding much more likely, and cuts to that funding much more unlikely.

We would like for UTMB’s hospital to be funded through a similar mechanism, since we were the first public hospital in Texas and are still a vital part of the state’s trauma, specialty, and primary care network. But when the mission-specific formula request was brought to House Appropriations by Rep. Bonnen, objections from a Dallas representative that it would be “another new formula” led to the subcommittee deciding not to even include it on the lengthy Article XI wish list. We have been told that the subcommittee hopes to study formulas in general during the interim period between legislative sessions, and our hospital formula issue could be considered then.

Regarding correctional health care, the House funded in the TDCJ budget request the entire amount of the proposed base increase request; in HB-2 (the Supplemental Appropriations Request), they funded another $50 million to pay for shortfalls in the current biennium (meaning, 2014-2015). In HB-1 Article V, the House placed the capital requests, funds for employee salary increases, and funds to expand hours of operations and the hiring of additional staff in Art. XI wish list. As noted below, we will have to wait for a House/Senate conference committee to do its work before we know the final say on these items.

senate finance

Senate Finance Committee

In the Senate, the story is quite similar regarding UTMB’s primary agenda, since the Senate and House budget processes mirror one another.

  1. The Senate chose to also increase funding for formula in its budget, so that is good! The Senate formula increase was an additional 2 percent increase over the filed bill.
  2. The Senate chose to deal with institutional improvements in a different manner, funding slightly less than the full request for each institution. For UTMB, the education building funding is at $59.325M, compared to the $67.8M full request that is funded in the House version. The hospital base was maintained also in the Senate version of the budget. Although we wanted more added to the base through a formula mechanism as discussed above, no action has been taken on that. However, the formula request, plus a request for an additional $11.3M for the hospital, were included in the Senate’s Article XI “Wish List”.
  3. Lastly, UTMB’s Emerging Infections proposal was placed on the short list produced by the subcommittee for funding from Article XI. In the end, the Senate Article XI was expanded to include all exceptional item requests and is as long as the House’s Article XI, but we take it as a hopeful sign that the Emerging Infections request had initially been selected for a short list.

Concerning the TDCJ requests, the Senate was less generous overall than the House. The Senate allocated $20 million of the requested amount for rebasing the next biennial budget, they passed over raises for the employees, but did fund capital requests and expansion of services at the fully requested amounts. So as the House and Senate go into conference on Article V (TDCJ – CMC) issues, there is work yet to be done to resolve their budget differences. (I’ll cover the conference committee process in more detail in a future installment.)

What else is going on?
As you have likely heard one of the big issues in Austin has been regarding the right to bear arms, and more specifically where that right can be exercised. Although University of Texas System Chancellor William McRaven has gone on record before the House and the Senate opposing any legislation that would welcome the carrying of firearms on university campuses, the Senate passed out that legislation. The bill has passed the House committee and is on its way to the House Calendars Committee, where a date for its House floor debate will be set.

Chancellor McRaven with UTMB SOM Students at the Capitol

Chancellor McRaven with UTMB SOM Students at the Capitol

The issue is quite relevant and unique to UTMB since we not only have a prison hospital on our campus but also the Galveston National Laboratory (GNL). The right to carry would jeopardize the reauthorization of our GNL since the extensive and strict federal security requirements could not be met if guns were allowed in the facility. It could cost UTMB over $50 million in federal research funds. Our Austin team has had great support from Sen. Larry Taylor, who has worked with the bill’s Senate and House authors (Sen. Brian Birdwell and Rep. Allen Fletcher) to produce an acceptable-language addition to the bill that exempts the GNL. The bill has passed out of the House Committee with the GNL exemption in it, and we have been told that if the bill passes the full House, the Senate will accept the exclusion of GNL when the bill comes back to the Senate for concurrence. The bill already maintained the current prohibition of carrying a firearm in a hospital or prison.

What about Graduate Medical Education (GME)?
Well, that also received attention from both houses, with Sen. Jane Nelson making good on her promise to ensure increased funding on the Senate side. The House Appropriations Committee did likewise. Several new programs hosted by the Coordinating Board. The House chose to fund less in this area than did the Senate, but it is likely that a reasonable compromise will be reached in the conference committee. The message that Texas must have additional GME slots to accommodate the expanding number of graduates from Texas medical schools has clearly been heard.

So what’s next?
In a couple of weeks, the Lt. Governor and the Speaker of the House will each name members to form a conference committee to review the combined budget proposals line by line. In that process, members will seek compromises on budgets that can be accepted by both houses. Then that product will move to each body for a vote.

Although the proposed budget in the House is a good start when compared to prior budgets, some would say that it falls short in public education spending. Others would also note that Texas roads and rail need more transportation funding. The Legislature also has failed to fill a rather large ($768 million) shortfall in TRS’s health plan. The Legislature did move forward to fill a hole in the state employee retirement plan (ERS). There were also some victories for Child Protective Services with increased funding, along with a small but highly sought increase to attendant care pay for individual home care programs.

There have been no significant changes in funding in the Medicaid program on a per-unit basis other than increases driven by increases in enrollment. Specifically there is no money dedicated for Medicaid expansion.

The proposed “tax relief” package will actually decrease the revenues collected by the state and add to the likelihood of more shifting of resources among programs.

Stay tuned as the journey continues!

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Fast Start

The 2015 Legislative Session got off to an accelerated start! We’ve hardly had time to respond to usual business with the massive number of meetings and hearings that abound.

So what is different this time?

For starters, we have a whole new team in Austin. All executive leadership has changed from Governor to Land Commissioner. And over half of the legislators (House and Senate) have served less than two terms in their districts. The Speaker of the House, Joe Straus, is the only person to return to his “old job” and that was with a recorded landmark vote of House members, only 19 of whom were opposed. Straus set a rigorous pace by naming committees and chairs in record time, and by shuffling up the leadership roles and distributing the talent around the table.

In the Senate, newly elected Lt. Governor (and President of the Texas Senate) Dan Patrick likewise, named his committees quickly, with Senator Jane Nelson continuing to chair the powerful Senate Finance Committee and Senator Charles Schwertner assuming the role of chair of the very important Health & Human Services Committee.

UTMB’s legislative agenda remains unchanged from this past fall when we provided testimony before the House, Senate and Legislative Budget Board. UTMB’s top priorities remain:

1. Growth in formula funding to support our educational programs for students, necessary university infrastructure for that purpose, and research critical to solving the health problems of the state and nation. All state universities share this same agenda item since the Legislature in 2001 reduced the allocation for formula funding (the amount that the state provides toward student education at public universities) and then went on to deregulate tuition in 2003. Of course, with fewer funds from the state, universities’ only option to cover increased educational costs has been to increase tuition. Increasing formula funding should offer students some future relief from tuition increases.

2. UTMB has grown its student population by 42.4 percent since 2006. With that growth (up from 2,600 when Hurricane Ike flooded its way through our campus to over 3,200 with this year’s fall enrollment), UTMB needs more space for student study groups, lectures, laboratories, and related activities. UTMB leadership’s answer has been to construct a new multipurpose, interprofessional education building on the west end of the Galveston campus. Without that investment, UTMB will not be able to continue to expand its enrollment to address future health care workforce needs of Texas. UTMB is asking the state for a Tuition Revenue Bond or other funding mechanism to provide $67.8 million toward that new facility; the remainder of the proposed $90 million building would come from philanthropy and university financing.

3. UTMB’s renovations and new buildings that have emerged from the wake of Hurricane Ike are now coming on-line, and with that comes the depreciation expense of those buildings in our budget. UTMB needs additional funds in its Health System budget to cover those expenses. Both UT MD Anderson and UTHealth Northeast (Tyler) have “formulas” that drive biennial increases in their hospital budgets. In the past UTMB has sought similar treatment from the Legislature but without success. UTMB is asking the Legislature to treat UTMB with equity regarding the base hospital increases received by other UT System hospitals.

4. All Health Related Institutions have asked for “special item” appropriations to fund university improvement projects and/or research deemed vital to the overall success of the university that also benefits the state and nation. UTMB has asked for three critical areas of support:

Combating Texas’ Emerging Infections ($8.55 million over two years)

i. Expands UTMB’s expertise in combating emerging infections by fostering collaboration with other Texas research institutions
ii. Focuses on the development of artificial organs and tissues that mimic human organs to facilitate the testing of drugs and vaccines
iii. Builds on the substantial federal and state investment in UTMB’s Galveston National Laboratory

Trans-Texas Vaccine Institute ($8 million over two years)

i. Creates a multi-agency institute to support collaborative projects that expedite the development and production of needed vaccines
ii. Builds on the success of UTMB’s interdisciplinary Sealy Center for Vaccine Development, and maximizes impact of expertise found through Texas’ higher education community
iii. Bolsters UTMB’s recent designation as a World Health Organization recognized vaccine center, and helps propel Texas to the forefront of vaccine development in the nation

Regenerative Medicine Matching Grant ($6 million over two years)

i. Provides two years of funding to leverage the recent four-year, $3 million per year Moody Foundation grant focused on reversing trauma induced alterations in the brain and spinal cord
ii. Supports multidisciplinary projects to create agents capable of reversing trauma induced alterations of the brain and spinal cord

Governor Greg Abbott delivered his first “State of the State” address to a combined session of the Texas House and Texas Senate and received an enthusiastic welcome from members of both chambers. Abbott stressed the importance of Texas charting an aggressive course for the future, outlined his budget priorities and listed five items that he placed on his “emergency agenda” – early education, higher education research initiatives, border security funding, transportation funding and ethics reforms.  That agenda simply means that the Legislature is asked by the Governor to make those items a priority for early action during the session.

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The End is…..Near?

Midnight Monday, May 25, 2013, was supposed to herald the end of the 83rd Legislative Session. Some described the whole session as a very long Seinfeld episode—much talk, little action. But in the waning days, it is readily apparent that this has been one of the most productive sessions, with less conflict among members, in recent memory. The litany of potentially divisive issues from past years was absent, so members were able to build trust and rapport with each other over issues of mutual concern, like public education, water availability, transportation, higher education, public safety and the state’s economy.

In addition, the large number of “freshmen” legislators proved to be an asset with their new ideas and open, innovative minds focused on problem solving. The House even instituted a “purple tie” day each Thursday to reminded Republicans (red) and Democrats (blue) that together (red + blue = purple) they worked for common outcomes for the benefit of Texans.

For UTMB, the session was not without its ups and downs since the university is subject to a multitude of funding articles in the budget and impacted by no small number of regulatory changes and Health and Human Services budgetary changes. Even Public Safety in Article V impacts UTMB since it deals with the state’s prison system. As is always the case, the real financial impact often cannot be seen until the dust settles and the effects of the myriad individual funding changes have been analyzed.  But for now, our results fall into the following general patterns related to our legislative appropriation requests:

  1. UTMB asked for growth in formula funding to support the education of our health professions workforce, to provide necessary infrastructure and to build our research infrastructure. Formula funding for the next biennium will increase by approximately $24.5 million. Overall, Chairman John Otto and others of the House Appropriations subcommittee on higher education elected to put more money into formulas to be used at the discretion of the university than to fund special projects and exceptional items as in times past.
  2. UTMB asked for a continuation of the 2012-2013 funding levels for the UTMB Hospital and Health System and for the creation of a Hospital Formula to protect us from drastic General Revenue reductions like we experienced in the last session. The House Appropriations Committee (HAC) was not inclined to create a hospital formula for UTMB at this time, even though both UT Health Science Center at Tyler and UT MD Anderson Cancer Center both have mission-based formulas. Instead, the higher education subcommittee of HAC decided to perform an interim study on that subject and take a look at all higher education and health-related education funding formulas to ensure equity among institutions. The Legislature did respond favorably to our request for an addition to our hospital base by adding $10 million for the biennium since no formula was forthcoming.
  3. Although UTMB and other Health Related Institutions requested exceptional item funding for specific research projects, the House Appropriations Committee elected to forgo those appropriations and fund formulas instead.
  4. At the close of the session, the Tuition Revenue Bond (TRB) bill was caught up in last-minute conference committee deliberations and failed to pass out of the Legislature. This will be placed on the agenda for the special session; UTMB has a $40 million request for funding of a new educational building on the Galveston UTMB campus; the request has been approved by both the House and Senate, but it has not released from conference. That means a new bill will have to find its way through the special session for this purpose. We already know that the bill filed for the special session will lower all TRB requests by 15 percent, reducing our $40 million request to $34 million. But our legislative delegation will work to achieve maximum funding, consistent with what other institutions receive.
  5. Correctional health care funding was an issue of great controversy in prior sessions. However, in the 83rd session under the new contractual arrangement with TDCJ, UTMB has been paid monthly for its provision of health care services by TDCJ so there was no need for a Supplemental Appropriations Request. Instead, the Legislature was able to focus fully on the current and future needs of the correctional health care delivery system. In the end, they agreed upon the following appropriation of $61.7 million for correctional health care funding for the 2014-15 biennium:

Total Appropriation UTMB Portion*
Adjustment to Base $30.6M $27M
Salary Adjustment $16M $12.4M
Capital $54M $4.9M
Restore Staffing $9.7M $3.8M
Total
$61.7M
$48.1M

*Remaining portion goes to Texas Tech University.

There is a host of other changes that we will discuss, but of major importance is UTMB’s continued growth in resources to finance its health care operations, research and educational programs, and community benefits programs. Looking back over the past four sessions, we see the following pattern:

Biennium Appropriation Amount
2008-2009 $457.7M
2010-2011 $566.6M1
2012-2013 $474.2M2
2014-2015 $506M3

  1. Base adjustment after Hurricane Ike; does not include $150 million in Ike matching dollars or $150 million TRB for construction of new Jennie Sealy Hospital.
  2. Reduction of 16.65 % from prior biennium mostly in GR funding reflecting large state GR reductions in higher education; not inclusive of extension of $150 million Ike match
  3. Does not include $11.4 million increase in benefits or potential TRB for educational building.

The state budget is a composite of Senate Bill 1, House Bill (HB) 1025, HB 6, HB 7 and Senate Joint Resolution (SJR) 1—and a lot of sweat equity. Overall, the state budget saw a very modest increase driven by population growth and public school enrollment growth.

  • SB 1 reflects a 3.7 % increase in overall appropriations over the last biennium.
  • SJR 1 sends to voters in November 2013, a referendum on a constitutional amendment to establish the State Water Implementation Fund.
  • HB 1025 is a supplemental bill that puts $2 billion into the water resources fund (if the voters approve SJR 1) and additional money in public education.
  • SB 7 is the fiscal management bill, which consolidates all of the budgets into one ledger.

Public education received serious attention from both parties during the 83rd session. For the state’s public schools, most would agree that this was a winning session. Most of the draconian reductions from the 82nd session were restored and, moreover, the number of end-of-course exams required to graduate from high school was reduced from 12 to 5. Standards were also changed at the high school graduation requirements allowing schools to issue three degrees based upon credit hours, acknowledging the fact that not all high school graduates will head for college.

  • SB 2 expanded the state charter school system and HB 5 changed high school testing and graduation requirements as mentioned earlier.
  • The authority for oversight of charter schools was transferred from the State Board of Education to TEA.

Higher Education

  • HB 29 requires public universities to offer incoming students a four-year, fixed-rate tuition option.
  • SB 215 renewed the authority of the Texas Higher Education Coordinating Board but with some modifications/restrictions in its authority. The bill restricted the THECB from permitting the American University of the Caribbean from sending medical students to Texas for training and changed the rules for the TEXAS Grant program.
  • SB1907 does NOT permit campus carry of concealed handguns, but it does allow CHL holders to store firearms and ammunition in locked cars on college campuses.

Criminal Justice

  • SB213 was passed to reform and reauthorize the state’s prison system, permitting TDCJ leadership to decide how best to address their capacity issues.
  • Corrections-related budget bills also provided for salary increases for correctional officers and for health care employees in the system.
  • Additional reforms expanding membership of the Correctional Managed Health Care Committee were also passed, adding four new members (two from the mental health profession and two from state medical schools). Both UTMB and Texas Tech also retrain a physician member of the committee. The committee’s scope changes to production of the Offender Health Plan and quality oversight; contracting is now the sole responsibility of TDCJ.

Health Care

  • SBs 7, 8 and 58 by Senator Jane Nelson, chair of the Senate Health and Human Services Committee, targeted Medicaid fraud, transitioning of acute and long-term care services and expansion of behavioral health services. The GOP stand against Medicaid expansion also passed in the form of an amendment to SB 7, banning coverage for low-income adults.
  • SB149 allocated another $600 million over the biennium to CPRIT after the addition of measures to better prevent conflicts of interest at the agency
  • Senator Charles Schwertner’s SB 1106 assures independent pharmacies of more transparency when negotiating rates with Medicaid managed care organizations.
  • SB 1803 and SB 1106 protect Medicaid providers’ due process rights during investigations of fraud allegations and decreases administrative burdens on providers who contract with multiple Medicaid managed care plans.
  • Scope of practice for advanced practice nurses and physician assistants was also revised to increase to level of their training while still requiring physician oversight.

Immigration

  • Bills aimed at creation of a driver’s permit for undocumented immigrants failed, as did other immigration reform measures.

Special Session

As the House and Senate adjourned Sine Die around 5 p.m. on Memorial Day—neither having completed the full book of business set out for the session—the Governor issued a call for a Special Session to begin at 6 p.m. that same day. The only item the Governor has formally placed on the agenda is the unfinished business of redistricting. The House and Senate have appointed committees to study that issue in light of prior legislative action and state and federal court comments. The Legislature will bring forth recommendations to stay with the current districts as utilized in the 2012 elections or to recommend changes. Whatever transpires is sure to be surrounded with highly charged debate.

Other issues may find their way onto the special session agenda. Senator Kel Seliger has already filed a bill for TRBs for state universities totaling almost $2.6 billion. Other issues related to transportation funding, social issues such as abortion and drug testing for Temporary Assistance for Needy Families aid recipients, may also find their way on the agenda.

June will be a busy month for those linked to the Legislature so cancel those vacations and stand alert!

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100 Days and Counting …

As I write this, we are 105 days into the 83rd Legislative Session. It is time to take stock of where we are and what we have to get done prior to Sine Die on May 28! 

Both the Senate and House have wrapped up their budget proposals with minor (and in some cases MAJOR) tweaking continuing to occur. The President of the Senate has appointed five members to the Conference Committee; they will be joined by five members from the House appointed by the Speaker to put the final touches on the budget for the next two years. 

Conference Committee Membership, 83rd Legislative Session

Senate House
Tommy Williams Jim Pitts
Chuy Hinojosa Sylvester Turner
Jane Nelson Myra Crownover
John Whitmire John Otto
Robert Duncan John Zerwas

The agreed upon budget will have to then pass both houses and go to the Governor for his signature. The Governor may veto the budget and send it back to the Legislature for more work (which almost certainly ensures a special session), he can sign the budget, or he can express his disapproval of the budget by not signing it and simply letting it become law at the will of the Legislature.

As we take stock of the progress made by the Legislature over the past several months, the Senate wins the race in that it has heard as many bills at this time during the session as it did in the entire 82nd Legislative Session. However, the House has passed out only about a third of the number of bills as it did in the prior session. The House’s deliberate pace many be a way of minimizing the debate (and controversy) of certain issues.

Specific actions of interest include the following:

  • SB 143 (Nelson), which allocates $11.5 million in the next budget for Graduate Medical Education
  • SB 329 (Huffman), which prohibits minors from using tanning beds because of the increased link to melanoma in young adults
  • SB 822 (Schwertner), which regulates companies or networks that sell, lease or share physician discounts without the physician’s consent
  • HB 63 (Craddick), which bans texting while driving a motor vehicle (Distracted driving costs the US economy $3.5 billion each month; the impact to Texas is thought to be $3.6 billion annually.)
  • HB 3791 (Zerwas), which has a hearing scheduled this week in House Appropriations; if passed it could serve as a future vehicle for Medicaid expansion in Texas (see below for more information)
  • CSHB 1025, the Supplemental Appropriations Bill, which passed out of the House Appropriations Committee this past week and is on its way to the Senate (This bill provides the requested $39 million Supplemental Appropriations Request to cover the estimated funding shortfall for correctional health services.)
  • $17 million allocated by the House to the Higher Education Coordinating Board for 2014-2015 as additional funding for GME start-up programs

Additional bills related to health care scope of practice are pending, including one which lowers the age limit to 6 for pharmacists to administer vaccinations to children. This has been opposed by the Texas Society for Pediatrics based upon presumed negative impacts on the medical home initiative and adverse impact on health and developmental screening. 

Another proposal that would expand the ability of physical therapists to see patients directly for musculoskeletal problems has met with opposition from the orthopaedic surgery and physician community. Likewise, an initiative that would affirm licensure for clinical laboratory scientists has met with opposition from organized commercial medical laboratories who cite increased personnel costs as their main objection.

Overall the issue of health profession shortages continues to gain much attention during the legislative session; however, there is yet to be an acceptable agreement on the best approach to deal with scope-of-practice and access issues.

The House Appropriations Committee met on Tuesday, April 23, and passed out Zerwas’ bill (HB 3791), which focuses on the following summary from the TMA website:

The legislation would create a ‘Texas’ solution for covering the working poor in Texas. The bill consists of four key components:

  • Structure: First choice for coverage for low-income Texans would depend on the state receiving an unrestricted block grant from the federal government to run Texas' current Medicaid program.
  • Funding streams: If the state cannot obtain a block grant, the Texas Health and Human Services Commission (HHSC) would funnel the money in concert with the Texas Department of Insurance (TDI) to purchase private health insurance policies for people under 133 percent of [federal poverty level].
  • Payment: The bill includes reforms that Texas can implement concurrently with a block grant, such as cost-sharing, which means Medicaid recipients would pay a percentage of the coinsurance and/or deductible.
  • Oversight: The bill creates a committee to oversee the implementation of the program. State leaders would appoint members of the committee.

Representative Zerwas said, "This is not expansion of Medicaid. This is creation of a new program that leverages our partnership with the private sector. This is not an entitlement program." He added, "I understand the political radioactivity surrounding this particular bill. This would have a profound impact around the provision of care … and ultimately see a benefit to the taxpayers."

House Appropriations also moved Texas’ water issues a step closer to a House vote by proposing that $2 billion from the Rainy Day Fund (HB 11) be used to address the state’s water shortage.

Both House and Senate Conference Committee members have started their work on crafting a budget for the state. This is the time that meetings start early in the day and go far into the night. It is also the time that lobbyists and citizens start vocalizing their personal support for issues in that budget.

And in an unexpected twist to an otherwise quiet legislative session, the House voted to NOT extend the Lottery Commission at the time of this blog’s writing. That means there is suddenly a $2.2 billion gap in the revenue projections for the budget (including the potential for UTMB to lose more than $10 million in dedicated indigent care funding for the 2014-2015 biennium). This new development adds quite a challenge for the Legislature as members work to reach agreement on budget.

 

ADDENDUM:  After realizing the adverse impact on their budget, the House revisited their earlier decision in the afternoon to sunset the Lottery Commission and reversed itself to extend the Commission, thus avoiding a derailment of their budget work over the past 105 days.


It’s not over until it’s over, so as always, stay tuned for updates.

 

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Budget Buzz

 The Texas 83rd Legislative Session is well past its midpoint, and Senate and House financial leadership have crafted a straightforward, no-nonsense budget to take to their colleagues in the House and the Senate. The Senate voted out its budget this past week, and after several tweaks on the House side, their budget will be ready for consideration by the whole House on Thursday, April 4. We will witness House members engage in a lengthy floor discussion and vote for passage with a generous number of amendments, then a conference  committee made up of members from both houses will iron out the differences between the two chambers and reach consensus for the approval of both houses.

So where are we at UTMB in all this? We are glad to see the emphasis placed by both houses on restoration of funding in the formula to support the operations of our educational programs and to support the operation of our hospital. Although we would like for our hospital appropriation to be placed into a mission-specific formula, it appears that formula changes will be reviewed  in a more in-depth fashion during this next interim period between legislative sessions. Timing is everything!

What about the university exceptional item requests? These continue to reside in Article XI of the Senate Budget, which means they can be brought back up for discussion and/or funding if sufficient funds are available in the final days of the session. But, in reality, the mood among members of the Legislature has been to place additional funding into the overall educational support funding rather than in special projects for each university. UTMB has found a strong advocate and friend in alumnus and former faculty member Dr. Greg Bonnen. Dr. (State Representative) Bonnen from Friendswood has filed an amendment to the House version of the budget that would place an additional $1.5 million of funds into UTMB’s operation of the Galveston National Laboratory to offset federal cuts anticipated through the sequester. 

Representative Eiland will also offer up an amendment to restore funding from the unclaimed lottery proceeds to UTMB’s Indigent Care Fund to $10 million per year (rather than the reduction to less than $5 million per year in the current budget).

Correctional Managed Care’s budget requests have found some favor, especially in the Senate with the past two years’ shortfalls added to the base budget, plus an overall base budget increase in anticipation of the increased costs associated with medical inflation. In addition, the Senate has added funding to support salary adjustments for employees (who have had no increase in more than four years), funds for capital improvements (especially digital radiology equipment) and funds for restoration of staffing at selected units.

The issue of provider representation on the Correctional Managed Health Care Committee came up this week in the Senate during a vote on recommendations to restructure the committee. The proposed legislation would have eliminated representation from Texas Tech Health Sciences Center and from UTMB on the committee. Interventions by Senator Robert Duncan and Senator Tommy Williams thwarted that effort, and the Senate adopted language that reconfigures the CMHCC membership to include both Tech and UTMB. as well as two members from other medical schools and two members from the mental health profession.

There is much going on beyond the financial issues that have plagued the state for the past several sessions. The House voted unanimously this past week in support of creating a new mega-university in the Valley under the auspices of the UT System. That university would consolidate UT Brownsville and UT Pan American into a single entity and add a medical school. The university would be eligible for Permanent University Fund (PUF) funding and would immediately undertake the development of a medical school/health sciences center. Support for the new university would come from PUF, local contributions and the UT System. No name has been selected for the university; that will be left to the discretion of the UT System Board of Regents. The addition of a medical school serving South Texas is hailed as a way to address the health care provider shortages that have plagued that region for decades.

Senator Nelson’s Scope of Practice bill (SB 406) has left the Senate and is headed for the House. That bill expands the ability for physician assistants and advanced practice nurses to expand their scope in prescription authority but continues to call for them to report to a physician team leader. Leadership from the Texas Nursing Association, the Texas Academy of Physician Assistants, Texas Pediatric Society and Texas Medical Association have all weighed in to support the bill. In addition, there is another bill that proposes the expansion of the physician assistant education programs in Texas by the addition of a “fast track” for individuals with prior health care experience, such as certified military medics and international medical graduates.

The topic of guns on campus is back for another round of discussions at the Capitol. The right to carry a concealed weapon (with permit) onto a university and/or  hospital campus has resulted in considerable discussion. UT System Chancellor Cigarrora weighed in on the discussion with the following statement, in a Feb. 24, 2011 letter to Governor Rick Perry:

 “I have great respect and value the authority of the Legislature to make this important public policy decision, and I recognize the variety of opinions surrounding it. …Yet parents, students, faculty, and administrators, and the institutional law enforcement have all expressed to me their concerns that the presence of concealed handguns on campus would contribute to a less-safe environment, not a safer one.”

At the Capitol, most of you might already know that a concealed weapon permit gains you access to the building’s interior without going through the usual metal detector and/or security screening process. Some writers have speculated that the Capitol itself probably has more people carrying concealed firearms than any other building in the state! Texans feel strongly about their right to carry, so expect a healthy discussion on this issue. Remember that during the last session the Legislature approved the shooting of feral hogs with automatic weapons from helicopters! Anything is possible. The UTMB Faculty Senate has gone on record as being opposed to concealed carrying of weapons on campus.

Public education continues to be a topic of healthy dialogue in both chambers, with proponents of school vouchers, increases in funding for schools, changes in graduation requirements, changes in testing requirements, and reviews of core curriculum standards all getting generous discussion and action. The House passed out a hefty school package last week and added $1 billion in funding as they voted out their budget recommendations from House Appropriations.

This week’s activities should set the stage for the House to vote their revised version of the Senate budget, and then for a Conference Committee made up of House and Senate members to review and take action on that budget. As always, stay tuned for more.

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Bee Hive at the Capitol

The past two weeks have been as busy as the proverbial bee hive at the Capitol. The House Appropriations Committee (HAC) and the Senate Finance Committee (SFC) have both allocated their work into subcommittee groups for each article in the state budget. That means that a subgroup has studied their assigned major issues with great detail. Each of these subcommittees becomes “subject matter experts” on the funding of their focus issues.

For example, with the Subcommittee on Higher Education in the Senate, four highly experienced senators came together and reviewed the major issues and financial challenges facing Texas’ higher education institutions. They reviewed quality metrics for each institution and performance metrics related to graduation timelines, employment after graduation and other factors. Multiple pieces of data are being analyzed by committee members and their staff. Funding formulas are being evaluated to ensure that the impact of funding to each school is reflective of the Legislature’s intent to reward desired performance and to sustain stellar programs. Funding decisions will be largely based on hard data and less so on subjective feelings or intuition.

One must appreciate the amount of time that each legislator devotes to this process and the amount of study that is required of the issues, data and testimony provided by experts in a myriad of fields. Hearings run from 7:30 each morning until the time that the House or Senate takes up business at 10 or 11 a.m.. Subcommittee meetings resume immediately after the Legislature adjourns, which is almost always by noon. Afternoons and evenings are long for those members serving on the financial decision-making committees, as is the endless stream of people trying to get into their offices to advance their personal or agency agendas.

So how is UTMB impacted by all this activity? It is very early in the session, so all the moving parts are still moving … at warp speed. UTMB’s base funding, as directed by the formula increases from both House and Senate, is favorable. It is too early to arrive at a specific number. It is safe to say that the number will change as the House and Senate go to Conference Committee and as they consider the new revenue estimate that will be delivered by the Comptroller early in April. With the Texas economy booming and the “oil patch” boom increasing state revenues at record-breaking pace, there will be more money available for funding health care (through the Health and Human Services Commission) and higher education should the Legislature and executive branches decide to do that.

UTMB’s  request for formula funding for the hospital has been discussed by both House and Senate appropriators and currently lives in Article XI of the House version of the bill. This means that it still has a chance for consideration at conference committee. However, both House and Senate appropriators have discussed a need to thoroughly reevaluate all higher education funding and formulas during the interim to arrive at a fairer distribution of state funds among all higher education institutions. These formulas were developed in the late 90s, and since then issues have arisen from differences in rates at which institutions are able to grow student enrollment, differences in missions among institutions, and differences in formula methodologies between general academic and health-related institutions that must be addressed with the emergence of new administrative structures that combine an HRI and a general academic institution (e.g. A&M, proposed new UT medical schools). At this point it seems likely that UTMB's hospital formula proposal will be considered during the interim review; and even if the Legislature ultimately adopts a UTMB hospital formula in this session, it will be reevaluated along with all other formulas during the interim.

Formula background: Most higher education institution funding is appropriated through formulas that distribute funds among the institutions on the basis of metrics like student counts, space needs, and research activities. In addition, some HRI hospital appropriations are made through patient-based formulas specific to those institutions. For the most part, the remainder of higher education funding is appropriated in “special items” (a budget bill category that contains funding for specific and unique programs at each institution – like UTMB’s AHEC appropriation. Many special items are for specific research programs.)  UTMB’s hospital is funded as separate line item that is neither categorized as a “special item” nor based on a formula. As the Legislature tends to try to fund formulas first, before non-formula items, and to protect them as much as possible during times of budget reductions, UTMB is hoping to have its future hospital appropriations based on a formula. Whether or not a hospital formula is adopted during the session, UTMB will be working closely with interim studies on higher education formula funding.

Exceptional Item funding is up in the air as the Legislature tries to decide just how much (if any) money to put into research and other novel programs at the HRIs. For now, those requests have all been relegated to Article XI for discussion in Conference Committee. The same is true for all the Tuition Revenue Bond (TRB) requests.

The Senate budget process has taken on a more “generous” nature but with the same overall results for universities and medical schools. Formula funding will increase for education, infrastructure and research based upon established metrics. TRB requests are still under consideration in the Article XI  umbrella, as are Exceptional Item Requests. 

Correctional health care funding has received much attention. Both the House and the Senate introduced budgets included an additional $39M above the previous biennial base to cover appropriation shortages. In addition, the House Appropriations Subcommittee has recommended $47M in additional funding. However, this does not include requests for market salary increases for employees, capital investments and restoration of staff positions.  The Senate has recommended a $30.6M adjustment to the new base, added $16M for salary adjustments, designated $5.4M for capital expenditures and $9.7M toward restoration of staff.

Earlier today the House passed out HB10, which placed revenue into last year’s budget to correct the underfunded amounts from the 82nd Session. With that squared away, the Legislature will now focus its attention on how to adequately fund public education and health and human services for the next biennium.

The deadline for filing bills was Friday, March 8th. Over 5,850 bills and joint resolutions were filed by the deadline, and committee hearings will start to go late and long. Work on the budget will continue on to the House and Senate floors, with the final intense appropriations work to be done in late April and May in conference committee when there will also be a new Comptroller’s revenue estimate. Then, the real debate will begin.

Diagrammed below is a simple version of how the budget process works (most of the time).

The Legislative Budget Adoption Process

 

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Students Make a Difference during Visits to the Capitol

Over 90 UTMB students from the School of Medicine (SOM) and the School of Health Professions (SHP) stormed the Capitol on the first Tuesday of February. They were greeted on the north steps by our local delegation of Representative Greg Bonnen, Representative Craig Eiland and Senator Larry Taylor. The student group was then introduced to the Legislature in both the House and the Senate, where resolutions were passed declaring it “UTMB DAY” at the Capitol. Senator Taylor was joined by Senator (Doctor) Charles Schwertner in delivering the recognition. Dr. Schwertner is a UTMB graduate and did his orthopedic surgery residency at UTMB; his wife Belinda is also a UTMB SOM graduate.

The Texas Medical Association (TMA) recognized the group at their awards luncheon with two awards: Largest Group and Largest Percentage of Membership  from a medical society.

 

The sea of white coats then spread out all over the Capitol with students visiting with their hometown legislators. Leading the UTMB students were second-year medical students Byron Smith and Kendra Kaderka, first-year medical student Robert McLaughlin,  and an array of other health profession students, including Student Government Association Vice President Jonathan Ruzicka, a second-year physical therapy major from the SHP. The students competently expressed their concerns about affordable tuition, availability of loan repayment programs for health care professionals, and the need for more Graduate Medical Education slots in Texas. 

After a thorough invasion of the Capitol, the group migrated to the Thompson Auditorium in the nearby TMA building. Joining them were Rep. Eiland, Rep. Bonnen and his wife Kim, and House Higher Education Chairman Dan Branch (whose nephew Daniel W. Branch is a third-year medical student at UTMB). Students spent about an hour and a half discussing the future of medicine with these House members. Rep. Bonnen is a UTMB med school graduate and his wife Kim graduated with a degree in occupational therapy from SHP. Rep. Branch is an attorney and major advocate for Tier I research status for our Health Related Institutions. 

The following week, another 35 students from the School of Health Professions added their voices to those who attended the prior week’s health policy activity. These students focused on the allied health science vocations. The group, led by Physical Therapy second-year class president Kevin Villarreal, met with legislators to voice their opinions regarding educational opportunities and student educational support.

Both groups have been highly effective in advocating for their professions and for improvements in higher education. These interprofessional learning opportunities are an integral part of UTMB’s culture. Learning an appreciation for the roles that each of the health professions contribute to the team is essential in improving the quality of health care. Our students truly are working together to work wonders.   

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Austin Update – January 31, 2013

The House and Senate have released HB1 and SB1, which are their preliminary versions of the 2014-2015 state budget. The two budgets are amazingly similar and only about $200 million apart. From UTMB’s point of view the historic and proposed funding schedule looks like this:

Biennium

Amount

FY08-FY09

$457.7 million

FY10-FY11

$566.6 million(1) 

FY12-FY13

$474.2 million(2) 

FY14-FY15 Senate Proposal

$494.0 million

FY14-FY15 House Proposal

$486.5 million

  1. Base adjustment after Hurricane Ike; does not include $150 million TRB debt service or $150 million Ike Match
  2. Reduction of 16.65% from prior biennium primarily in hospital General Revenue funds

The proposed growth in the base budget for UTMB is derived from formula funding growth associated with the increased numbers of students enrolled in UTMB schools, in the debt service for the Tuition Revenue Bond approved last session and in other formula-driven funds. 

Initial budgets for the Correctional Managed Healthcare enterprise are encouraging.  Both House and Senate have offered up a base budget that adjusts the base from the last biennium to include coverage of the prior deficits. Texas Department of Criminal Justice has also filed Exceptional Item requests that, if funded, would permit market adjustments for employees, addition of capital expenditures for imaging and vehicle replacement, and resources to address rising pharmaceutical costs and restoration of staffing.

Another encouraging financial factor has been the Legislative Budget Board’s approval over the past several months of UTMB’s drawing down revenue from the $150 million Ike recovery match account to pay for Ike-related damages on campus. This approval negates the need to extend this process during this legislative session and allows UTMB to proceed rapidly with Ike-related repairs on campus.

The Lieutenant Governor released his committee appointments last week and conducted the unusual practice of having the senators draw lots to determine who among them will serve two-year terms and who will serve for four years before their next election.

Newly elected Galveston County Senator Larry Taylor drew a four-year term for his district. Taylor was also appointed to serve on Senate Health and Human Services, Education, and Intergovernmental Relations committees.

Senate Finance is chaired by Senator Tommy Williams of The Woodlands; Senator “Chuy” Hinojosa serves as Vice Chair. Other members include Senators Duell, Duncan, Eltife, Estes, Hegar, Huffman, Lucio, Nelson, Patrick, Seliger, West, Whitmire and Zaffirini.

The Senate Higher Education Committee is now chaired by Senator Kel Seliger of Amarillo, with Senator Kirk Watson of Austin serving as vice chair. Other members include Senators Birdwell, Duncan, Patrick, West and Zaffirini.

On Tuesday morning, Governor Rick Perry delivered his “State of the State” address to a joint session of the House and Senate. Emphasizing the importance of maintaining the state’s successful economic growth, Perry surprised many by praising both Democrats and Republicans for their leadership in economic reforms associated with the state’s steady growth over the past 10 years, citing in particular the absence of a state income tax, tort reform and control of government spending. He also called for the state to use money from its Rainy Day Fund to address water resource issues and to support continued investment in infrastructure, especially transportation. The speech was interrupted mid-way by a group of hecklers calling for Medicaid expansion. The disruptors were quickly escorted from the House Gallery and the speech resumed without further interruption. Perry closed by calling for collaboration among members to address the infrastructure and educational needs of citizens in the state.

Later that same day, UTMB’s President, Dr. David Callender, presented UTMB’s Legislative Appropriations Request to the Senate Finance Committee. Callender thanked the Senate’s members for their continued support of the university’s recovery after Hurricane Ike, and pointed out that UTMB‘s student enrollment has grown by more than 600 students since Ike. He presented UTMB’s request for formula funding, a mission-based formula for the UTMB Hospitals, and our three Exceptional Items: (1) Trans-Texas Vaccine Institute ($8 million), (2) Regenerative Medicine ($6 million) and (3) Emerging infection Disease Research ($8.55 million). Additionally, UTMB has asked for a $40 million Tuition Revenue Bond to build an $80 million new inter-professional student education facility.

The Honorable Joe Strauss, Speaker of the House, named membership of the House Committees at 11 a.m. today (Jan. 31); most committee chairmen called for immediate organizational meetings. 

Rep. Jim Pitts returns as chair of House Appropriations and Rep. Sylvester Turner as Vice-Chair. Also on Appropriations is newly elected Galveston County Representative Dr. Greg Bonnen. Representative Craig Eiland will continue to serve as Vice Chairman of the House Insurance Committee and Representative Bonnen will serve as a member of that committee also. Representative Tan Parker will chair the House Corrections Committee with Representative James White serving as Vice Chairman. Full lists of committees can be found at www.house.state.tx.us.

Losing no time, Representative Jim Pitts called an organization meeting of the House Appropriations Committee for 30 minutes after the House’s adjournment today and announced that hearings for the committee will begin at 7:30 Monday morning. In that meeting, very much like in the Senate, members will hear reports on revenue availability and Legislative Budget Board recommendations. 

More to come in the coming weeks…

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Day 1 (Tuesday, Jan. 8)

With a backdrop of cold, gray, rainy skies, the Texas 83rd Legislature got under way on Jan. 8. Right away, a long-anticipated challenge for the Speaker of the House position evaporated as a lone competitor withdrew from consideration. A quick line of nominations and seconds propelled Speaker Joe Straus (San Antonio) back into that leadership role by acclamation (and without a roll call vote). 

The 83rd Legislature is a changed institution demographically. It is home to 95 Republicans and 55 Democrats in the House; compared to last session when the Republicans held a 101 supermajority, this year’s membership will require a lot more discussion and inter-party work. It is also a “new” House, with almost 50 percent of its members having served one term or less.

Over in the Senate, there was a 20 percent turnover ending with 19 Republicans and 12 Democrats. The Senate has a host of new key committee chairmen in areas such as Higher Education, State Affairs, Finance and Education, among others. 

One gets a dramatic view of the changes that have occurred in the Texas political landscape when comparing the Texas Legislature from 1987 to that of 2013:

 

 

1987

2013

Republicans

67

114

Democrats

114

67

Women

18

37

Hispanics

24

37

African Americans

13

18

Rural White Democrats

56

1

White Democrats

83

10

 

This new face of Texas has convened to tackle a diverse group of problems on a stage set with affirmational economic news from State Comptroller Susan Combs. She announced on Monday that the Legislature will have at least $101.4 billion at their disposal to craft the state’s next biennial budget, along with about $11.8 billion in the Rainy Day Fund. All indicators also point to Texas’ economy being among the strongest in the United States. In fact, if Texas were a nation, its economy would rank 14th in the entire world.

State leadership, including the Governor, Lt Governor and Speaker, have consolidated their priorities for the session with a focus on expanding the Texas economy and employment, education (public schools and higher education), transportation and water resources. Also high on most agendas is the topic of health care services.

UTMB’s legislative agenda this year will focus on the future of our educational, research and clinical missions. It is our hope that the bulk of our FEMA funding issues are behind us and that we will be able to focus on those issues that permit us to build a healthier future for our students, patients, faculty and staff. Therefore, we will focus on growth in formula funding support for our health education programs in all of our schools, in our infrastructure and in research. We will also ask the legislature to move our hospital’s funding from the General Revenue category into a formula like that at both MD Anderson and UT Health System Tyler. Because our hospital funding was not in the formula category last session, we were subjected to higher reductions in funding than were our sister institutions. In short, we are asking for equity in our hospital funding for the future.

UTMB has seen a major increase in students, especially in the School of Nursing and the School of Health Professions; UTMB has 500 more students this year than it did four years ago. This growth warrants continued investment in our physical plan in the form of an inter-professional educational building. We will request a $40 million Tuition Revenue Bond to cover half those costs, with the other half coming from philanthropy through our capital campaign. 

Scientific research at UTMB holds great promise not only for the cure of disease and improvement of health, but also for the stimulation of technology transfer and growth in health services. UTMB will seek Exceptional Item funding for the following:

  1. The Trans-Texas Vaccine Center will focus on the development of promising vaccines for the treatment of both chronic and infectious diseases. Working with collaborators from other medical schools across the state and Texas A&M’s Vaccine Manufacturing Center, UTMB would lead a multidisciplinary consortium to aggressively develop preventive therapies for leading threats to health in Texas and beyond.
  2. UTMB’s Regenerative Medicine program will target treatment of traumatic brain injury by providing matching funds for the recent gift from the Moody Foundation to support development of new treatments for acute and chronic TBI using novel drugs in conjunction with stem cell therapies.
  3. Emerging infectious disease research will also be an area of focus, including work on a universal flu vaccine, multi-drug-resistant tuberculosis, and other recently emerging infectious diseases affecting the United States.

Looking ahead, the Senate and House have just released their initial versions of the state budget. The Senate will go into hearings by the end of January to critically assess the Legislative Appropriations Requests from all state agencies. In the House, committees will soon be appointed by Speaker Straus and the process of budget review will also be initiated there. In the meantime, UTMB—like all state agencies—is analyzing the initial budgets.

Stay tuned! 

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From Sine Die to Special Session, in 15 Hours!

For those legislators and staff who were planning on leaving the tumult in the capitol behind them, 5 p.m. Monday shocked many back to reality. The 82nd Session had ended just as prescribed after 140 days of deliberations and debate.

But with major bills caught up in the time limit rules in the House and Senate, both houses adjourned without completing their state business.  SB 1811, which outlines the fiscal matters that make the state budget a working document, remained unresolved.  And, key legislative matters related to cost savings in Medicaid that are critical to the budget were also sidetracked by time and dispute.

Gov. Rick Perry’s proclamation issued Monday afternoon called for “an extraordinary session of the 82nd Legislature” to start at 8 a.m. on Tuesday, May 31, to consider:

1.       “legislation relating to fiscal matters necessary for the implementation of House Bill 1 as passed by the 82nd Legislature, Regular Session, including measures that will allow school districts to operate more efficiently”

2.      “legislation relating to healthcare cost containment, access to services through managed care, and the creation of economic and structural incentives to improve the quality of Medicaid services”

The announcement, though expected by almost everyone, still came as a shock and dampened the usual festive celebration accompanying the last day of the session. Tomorrow would be yet another day, just like the previous 140 days. The making of the sausage was not over.  There would be no vacations, no time off for staff, and no time to focus on other pursuits.

Legislators are paid a whopping $600 a month in salary, so those of more modest means are quite eager to return to their primary livelihood.   Extending their time in Austin, away from home, family, friends and job places an extraordinary burden on them, a major stimulus for them to get to work quickly and return home!

A special session can deal with only the subjects designated by the Governor.  And, each house can decide what is germane to that call. Special sessions can last no longer than 30 days. Traditionally, they move at a much faster pace than a regular session, obviously because the scope is much more focused.  Both houses still must refer bills to committees, have hearings, and follow other rules and procedures.   The Calendars Committee also still has to post the bills to be heard in the House. The Senate, however, may operate in a more relaxed fashion.

Bills introduced in a special session usually are bills that already have been heard but failed to get final approval.  The proposals receive new bill numbers and undergo additional alterations but remain aligned with the Governor’s instruction.

This is only the seventh special session to begin the day after sine die, and only the fifth in 50 years to be held in the 20-day post-session veto period. This is the 115th special session since 1850.

The Governor also can add additional topics to this special session, or wait for the work on these issues to be completed and then call another special session. The news media already are reporting that the Governor is receiving pressure to add Texas Windstorm Insurance Agency , sanctuary cities, immigration issues, congressional redistricting and myriad other issues to his present call; on  Tuesday he added redistricting.

The Senate began the first day promptly, with eight bills in hand (someone worked throughout the night before) and referred them for consideration to the Senate Finance Committee and to the Education Committee.

Senate Finance began hearing the following this morning:

  • SB 1 by Duncan. This was formerly SB 1811 and relates to fiscal matters/non-tax revenue bills containing a hybrid school finance allocation method.
  • SB 2 by Ogden. This restores $34 billion to the budget bill that was contingent on the passage of SB 1811, which includes Foundation School Program payments to school districts.
  • SB 5 by Huffman and Nelson. This bill will establish an Interstate Health Compact (which in turn could allow Texas to opt out of traditional Medicaid and set up its own program).
  • SB 7 by Nelson. This is a Health and Human Services efficiencies bill that creates cost savings in CHIP and Medicaid.

The Education Committee took up the following:

  • SB 6 by Shapiro which deals with curriculum, instructional materials allotments, and textbooks.
  • SB 7 by Shapiro which is the former SB 12.  This bill provides school districts with management flexibility to save money.

In addition, there is a growing number of bills that are deemed by their authors to be relevant to the Governor’s call,  including SB 27 by Zaffirini, which calls for tuition revenue funding for university campus buildings. Of special importance to UTMB is HB 26 by Madden; this replaces HB 3459, providing for operating efficiencies in the correctional health care arena and for an offender premium charge estimated to produce about $13.5 million in revenue.

How long will the special session last? The simple answer is “until all the business is done.”  That could be a couple of weeks or more. There is a time limit of 30 days, so if the business is not finished, the Governor can call a second special session. 

Aren’t you enjoying Texas History and Government 101?

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The Finale…Sine Die

The 82nd Legislative Session has been quite a roller coaster ride — and it’s not over yet, with a special session starting today because the major fiscal matters bill needed to fund the  budget died in a Senate filibuster Sunday night.

 

By law, the special session can last 30 days; the Governor will determine what is “on the call” (i.e., what the Legislature is allowed to address). Some have lasted the full 30 days; others have finished in a few days, depending on the complexity of the issues in the call.   As of today, two large items are on the call:  fiscal matters needed to implement the appropriations bill, including school finance reform; and health care cost containment, managed care, and Medicaid structural and economic incentives.  

 

But for now, here’s an update on where things stand as the regular session ended. .

 

It seems like a century ago when Dr. Callender provided testimony before both the House and the Senate budget committees regarding UTMB’s remarkable resiliency and recovery from Hurricane Ike. Callender described a rapidly recovering campus, growing student enrollment and expanding clinical services, including recertification of the university’s Level 1 Trauma Center. He laid out the potential for an exciting future for the campus that many had previously thought should be moved, closed or otherwise diminished. He confirmed that the 120-year-old battle cry, “The University of Texas Stops for No Storm!” is still relevant.

 

And there have been plenty of storms in the 82nd Regular Legislative Session. From initial budget bills cutting UTMB funding by as much as 25%, to an audit critical of UTMB’s CMC division released in the first days of the session, to months of heated legislative debate on difficult health care issues with potentially profound impacts on patients and providers, to final hours when major revenue bills died and a special session loomed, the session was anything but smooth sailing.  

 

UTMB’s requests during the legislative session were modest compared to the requests of many others. The list was simple:

 

  • Fund the Tuition Revenue Bond for construction of the Jennie Sealy Replacement Hospital that was approved in the 81st Session ($11 million)
  • Permit UTMB to have continued access to the monies appropriated in the 81st Session for use related to Ike recovery and the FEMA match
  • Treat our hospital’s base appropriation reductions in a manner comparable to other health-related institutions with hospitals, and
  • Restructure the correctional health care contract to permit UTMB to contract directly with TDCJ, and provide a supplemental appropriation for UTMB’s CMC-related losses from FY10-11.

Achieving any of these objectives was a serious challenge given the guidelines under which the legislators were working: (1) no new taxes, (2) limited use of the Rainy Day Fund, (3) a conservative revenue estimate, and (4) a promise of “limited government/smaller government.”

 

The Legislature also found itself with new political forces in play. Many political pundits had predicted that the new “Tea Party” movement would have an impact on the 82nd Session, but most failed to predict just how powerful an influence this block of new legislators would have on the Legislature’s budget and policy agenda.

 

The appropriations process took many twists and turns, involving complicated interactions between several bills to produce savings, reform school finance and create revenue to fund the appropriations bills. The final result is a state budget that is about $15 billion less than the previous biennium, with only about 18 months of the next two years’ Medicaid being funded and public schools being $4 billion down from what the formulas would require for projected enrollment.   The Legislature openly acknowledged that it will have to fill in the FY13 Medicaid shortfall next session. All state agencies, higher education institutions and public schools took reductions.

 

Final appropriations for UTMB are much better than they could have been, given the circumstances. In the end, UTMB’s overall GR appropriation is a total of about $472M for next biennium, which includes $11 million for the proposed replacement hospital TRB debt service. UTMB’s hospital appropriation level was a major issue in the negotiations leading to the final total; thankfully the hospital reduction in the end was less than 15%, after being more than 25% for several months of negotiations on the bill.

 

In addition, UTMB’s Ike recovery funding from last session was carried forward for two more years, a critical help to UTMB due to the fact that some FEMA approvals are finalizing much later than expected. Although this funding had been appropriated last session, it was still a major step for the Legislature to give us access for two more years; they could have swept any unencumbered funds and used them for a host of other state budget needs. Even though that action would seem unlikely given the more than $1 billion in FEMA dollars these funds draw, there were several times during the negotiations when it appeared likely that UTMB would lose access to a portion of the appropriated funds. Thankfully, the Legislature’s final decision gives us full access through the coming biennium; we can continue with our Ike recovery as planned. This result was nothing short of miraculous work on the part of the Senate and House leadership and their staff.  

 

Financial issues and contracting issues surrounding the correctional health care contract have long been a source of concern for UTMB. Prior arrangements have resulted in all budget shortfalls being borne by UTMB until such time that the Legislature could meet and provide a supplemental appropriation to cover the amount of money UTMB had spent on offender health care. After much discussion with key leadership in the executive branch and both houses, changes to the correctional health care program will now place the financial responsibility for the program’s funding in the TDCJ budget. UTMB (and Texas Tech) will become vendors for health care services through a direct contract with TDCJ. The role of the correctional managed health care committee will be determined by TDCJ and will focus on dispute resolution, standards of care and review.

 

In addition to the budgetary issues related to UTMB’s future, many other issues affect our ongoing delivery of health care services. Funding for indigent care, trauma, diabetes and family planning were among the many reductions, along with reductions in Medicaid programs and rates. Higher Education Coordinating Board programs for graduate medical education and student loans were reduced. All of these affect UTMB and our fellow academic health centers.

 

In other areas of interest, there were no major scope of practice changes in the health care arena, except for an amendment that requires insurance companies to accept bills from chiropractors. There was no increase in scope of practice specifically for nursing or any of the allied health fields. Students were big losers in the state budget, with large reductions in student loan programs such as Texas Grants. Major reductions in funding were also seen in the women’s health care arena, especially for family planning programs.

 

As House Bill 1 finally left the Senate, the vote was 20-11. As House Bill 1 finally left the House, the vote was 97-53

 

Remember, it’s still not over.  The budget bills and major policy bills are on their way to the Governor, and he has until June 19th for vetoes.    And with the special session (possibly the first of several) starting today, anything can happen.  

 

As usual, stay tuned for the “rest of the story!”

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Nearing the End? Perhaps!

As the number of days on the session calendar grows shorter, the Conference Committee members from the House and Senate finally came together to present their recommendations for all Articles in the state budget, with the exception of Article III (education). 

Of special interest to UTMB was the presentation of the budget related to correctional health care services. In Conference Committee, the amount appropriated for offender health care was $858 million (a compromise between the House and Senate’s proposals). The compromise budget specifically calls for a greater reduction in hospital funding, maintaining pharmacy funding at $51 million per year, and reducing $7 million in unit-based and mental health services for the biennium. The Texas Department of Criminal Justice (TDCJ) will ultimately be responsible for allocating inmate health care resources in a manner that will ensure constitutional compliance (federal) of services.

The Conference Committee also restructured TDCJ’s contracting process with UTMB and Texas Tech. The future role of the Correctional Health Care Committee and its staff will be determined by TDCJ. UTMB will negotiate a contract directly with TDCJ for operation of the community-based units around the state, hospital and clinical services,  and certain other core services such as pharmacy, telemedicine and electronic medical records.

It was late in the week before the House of Representatives was able to finalize SB 23 (administration of and efficiency, cost-savings, fraud prevention and funding measures for Medicaid and CHIP). This bill substantially restructures Medicaid, expands managed Medicaid, and provides for a variety of direct cuts and spending reductions amounting to $1.65 billion. A large number of amendments were attached to SB 23, which precipitated much discussion and debate. Funding for the Medicaid/CHIP program remains an estimated $4.8 billion short of the amount necessary for the biennium. 

Finally, fiscal matters bills SB 1811 (state agency appropriations and state funding mechanisms) and SB 1581(fiscal matters related to public and higher education) reached the House floor for consideration. The impasse between the House and Senate regarding revenue sources reached a resolution that seemed acceptable to executive leadership in both houses.  The compromise funding agreement for higher education came to $830 million. No agreement was reached on the funding for public education.

The “guns on campus” legislation was attached to SB 1581 as a rider. A point of order related to the germaneness of the rider on SB 1581was raised immediately and sustained. SB 1581 was sent back to the Senate for reconsideration.  This additional delay has resulted in the House deferring once again the business on Article III budgets.

The failure of SB 1581 leaves the state without a comprehensive plan for public education unless an amendment can be placed on a Senate bill immediately. Key leadership is in heavy deliberation regarding potential ways to resurrect legislation regarding public school finance.

The Conference Committee has agreed on SB1811 and approved Article III (education), with the following items relevant to UTMB:

       10% reduction to formula-funded items (relevant to student and resident education)

       15% reduction to the hospital and clinics’ base budget

       25% reduction to all other special items in all health-related institutions’ budgets.

These reductions are fair when compared to the reductions at other health-related institutions.

The next step in the process is for the Conference Committee to vote out the entire state budget as soon as the printed version is available, which should be before the Memorial Day weekend. Both the House and Senate need to approve HB 1 in a formal vote before anything is official. In short, this means in theory (and politics) that some things still could change.

Currently on the horizon is the consideration of HB 4, the Supplemental Appropriations Bill. UTMB interests include the Supplemental Appropriations Request (SAR) for correctional care funding and the debt service for the Tuition Revenue Bond needed to construct the proposed Jennie Sealy Replacement Hospital and restore bed capacity to pre-Ike levels. UTMB has also requested an extension of time for the expenditure of revenue in HB 4586 (FEMA match funds) from the previous session.

It is NOT over until it is over!  “Sine die” is at midnight on Memorial Day, May 30, 2011. Anything can (and will) happen up until the moment the clock strikes midnight (and in some sessions they have unplugged the clock). 

Stay tuned.

 

If you want to get a real flavor for what is happening, go to:  www.house.state.tx.us  or www.senate.state.tx.us  during the time the House or Senate are in session and click on the live video stream. You will be able to follow the process and appreciate the pace and dynamics of the session.

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On the Edge…..

It is hard to find the words to describe this past week in the Capitol. Unusual?  Tense?  A cliff hanger?  A nail biter! 

However you describe it, the action has been fast paced and lively. It has had everyone on the edge of their seat.

Last week the Senate passed out its version of House Bill – 1 (the budget).  The House and Senate versions of the budget still are at polar extremes. The House has proposed a lean budget as it set out to do. The Senate version identifies additional revenue sources and proposes the expenditure of more funds, especially in public education and Health and Human Services.

The House quickly took up the Senate version and began the conference process. House conferees are House Appropriations Committee Chairman Jim Pitts (R – Waxahachie), Rep. John Zerwas (R – Richmond), Rep. Sylvester Turner (D – Houston), Rep. Myra Crownover (R – Denton) and Rep. John Otto (R – Dayton).

To hold the conferees true to the conservative “no new taxes and don’t use the Rainy Day Fund” desires of the House during the conference committee process, the House adopted “motions to instruct” the conferees as follows:

  • Conferees to adhere to floor amendments shifting family planning funds (Rep. Sid Miller)
  • Conferees not to use any funds from Rainy Day Fund (Rep. Phil King)
  • Conferees to keep amendment requiring separate legislation for fee increases (Rep. Phil King)
  • Conferees to use funding in House version for Emerging Tech Fund for schools, libraries, and nursing homes (Rep. David Simpson)
  • Conferees to prioritize any “found” money to public education and health and human services (Rep. Charles Perry)
  • Conferees to prioritize funding for women’s health programs (Rep. Warren Chisum)

 

Although the motions to instruct are non-binding, they certainly reflect the mood of the House and indicate to the Senate (and all others) that the super majority in the House will likely resist giving up any of its newly found power during this 82nd session.

 

On Monday morning the day began with the Senate announcing its conferees, which included Senate Finance Chairman Steve Ogden, (R – Bryan), Sen. Juan (Chuy) Hinojosa (D – McAllen), Sen. Jane Nelson (R – Flower Mound), Sen. Robert Duncan (R – Lubbock) and Sen. Tommy Williams (R – The Woodlands).

Conferees began meeting immediately and met diligently all week without reaching consensus on the very divergent budget proposals. Especially difficult to resolve are the differences in revenue proposed for public school funding and for health and human services funding. Late Friday, there was talk of a “special session” if agreement is not reached. According to precedent, the budget should be sent to the printers for formal codification by Thursday of the week (May 19, 2011). There is considerable skepticism whether or not that timeline is achievable.

This week also marked the deadline for bills to pass the House on second reading. Any bill not making the second reading by midnight Thursday meant almost certain death for the bill unless the author can successfully place it on another bill as an amendment. Most of the time, the author of a bill that has made it through the second reading will not agree to an amendment that may prevent the bill’s final passage (third reading).

So where does UTMB stand 17 days before session’s end? 

This is the most tense time of the session because others often attempt to add whole bills to existing bills still in the third reading process, which can produce unpredictable results. It is also a time that various desirable (or undesirable) items may find their way into fiscal matters bills. The House takes up fiscal matters issues on Monday or Tuesday, after letting the dust settle over the weekend while the conferees continue to try to reach some agreement on budget. 

 

The Tuition Revenue Bond Debt Service is in Article XI of the House budget and Article III of the Senate budget; overall it seems to have support in conference committee. Passage of this item in the budget will allow UTMB, with Board of Regents permission, to construct the Jennie Sealy Replacement Hospital.

 

UTMB Hospitals’ Base Funding remains a sensitive issue. The House version of the budget proposes a reduction of 25%, which would mean a $101M reduction to our hospital base budget over the biennium. We have prepared at the conferees’ request a "what if" scenario related to the impact of 25%, 15% and 10% reduction scenarios. We have also pointed out that the DSH-UPL that is generated by UTMB and placed into the state's General Revenue fund more than offsets any appropriation for our hospital base. Conferees will consider all options.

 

UTMB’s Post-IKE Recovery Funds ($150M from the 81st Legislative Session) remain of concern since the appropriation expires June 19, 2011.  UTMB is working to encumber these funds before they expire and has asked that the legislature consider an extension to the time for obligation of these funds past the June 19, 2011, deadline.

 

Correctional Health Care proposals in the Senate version of the correctional health funding bill call for a direct contract between the universities and TDCJ, with enhanced accountability, quality assurance and financial audit. Funding in the Senate bill was increased to approximately $900M (remember that this is for the whole program including Tech and UTMB). This is still an overall decrease of about 10% from the last fiscal year. The House conferees are making efforts to increase funding from their original $700M based on the recent HHSC audit of UTMB's cost structures.

 

The next two weeks will be filled with continued negotiations between House and Senate to reach an acceptable budget. If that does not occur, a “summer session” is  certain.

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Reality Check

I've written a lot about the state legislative budget process and its impact on UTMB over the past couple of months. Looking beyond our own focused interests, the Legislature is also dealing with a wide array of other issues that will certainly impact every Texan. There is much that bears watching as the session reaches its final days.

 

The Legislature has debated just about everything imaginable — from ultrasounds prior to elective abortions to "puppy mills" to raising the speed limit to 85 MPH to texting on your cell phone while driving. Guns-on-campus has been a very controversial piece of legislation that is currently blocked in the Senate because it lacks the necessary vote to be heard. But the Capitol has seen no shortage of gun enthusiasts calling on legislators to advocate for their right to carry on campus.  

 

We Texans are notorious for the preservation of our independence. So the Legislature most often reflects the mood and character of its people. If people want to drive 85 miles an hour, have a mini-armory at their side, text on the phone, chew, smoke or drink a sugar-laden soda on their way to a "puppy mill," these are matters the Legislature must consider, and the outcome may just reflect the will of the people.

 

Democracy is like that.

 

I "predicted" some things that would occupy legislators’ time as they went into this session, and I was right about some of them.

 

The budget process is far from being over and it has occupied more meeting time and involved more work than one can imagine. Countless hours of committee meetings, number crunching by the Legislative Budget Board, subcommittee activity, compromise and some complaints have kept members so busy that one wonders how they get anything done on all the other topics they must consider — but they do. They legislate and they appropriate.

 

Issues related to voter identification have certainly been dealt with quickly. New regulations will require voters to show photo IDs in order to vote. A driver’s license or other valid ID, such as a passport, will be required. Proponents cited the fact that photo IDs are required for all sorts of activities and that the same should be true for voting. Opponents point out that not everyone has a driver’s license and that procurement of a valid Texas license is difficult for some people in remote areas.

 

The requirement for women seeking an abortion to have an ultrasound done, view the ultrasound and wait for 24 hours prior to making a final decision about the procedure  passed the Senate in spite of vigorous opposition by a wide array of interest groups.

 

A bill to permit local police to establish legal immigration status during any routine contact with a person also passed, as did a request to the federal government requiring them to add a balanced budget amendment to the Constitution.

 

With large budget cuts looming over this 82nd Legislative session, the potential changes regarding higher education are numerous. . Texas grants providing financial aid to students were reduced significantly. As one legislator noted, this increases the financial burden on students and their families as they seek to obtain an education, with greater impact on the more economically challenged. At the same time almost every college and university across the state has announced tuition increases to compensate in part for the loss of funding from state general revenue.

 

Redistricting is just now taking center stage in the House of Representatives. The Texas House of Representatives Redistricting Map was released for public view today. As expected, the map was met with immediate opposition from several groups worried about sufficient representation under the proposed districts. This rings especially true for Hispanic voters. There is no doubt that redistricting will be a source for major discussion and political compromise over the next few weeks. 

 

Gaming (gambling) proponents continue a wait-and-see vigil. There are only one or two bills on file and there has been no strong push to advance these bills toward full discussion on the floor of either chamber. With the deficit so large, it is easy to imagine that the Legislature would jump to gaming as a potential solution. But, the magnitude of the deficit is so great that the contribution gaming revenue would make to the budget is considered small. Nevertheless, one can continue to speculate that it will surface as a $1 billion solution in the next few weeks, and even as I write this, a bill is emerging that would place casinos in five major Texas cities and two coastal communities.

 

Although border security has been discussed, there has been no major new proposal on this topic. This is likely because anything that the state would do in that arena would take money, and dollars are woefully absent in this session.

 

Public school funding has clearly been the center of attention for discussion in both the House and the Senate. The original budgets proposed by both chambers could have resulted in a reduction in force of more than 300,000 teachers. This in turn would require teachers to have more students in their classrooms. The backlash from school boards, superintendents and teachers has been a voice that Austin legislators could not ignore. Newly found funds have been quickly diverted to public education as a first priority.

 

Medicaid and other programs in Health and Human Services continue to face approximately 10 percent reductions across the state with no new funding designated for increased enrollment or expansion of services in these programs. In fact, the programs are being transitioned to "managed" programs or HMO-like programs in an effort to further reduce related costs. The impact to the state's hospitals and healthcare workforce is obvious. Many physicians have already begun to exit the Medicaid program because of its insufficient reimbursement for services. Senate bills 7 and 8 by Sen. Nelson and supported by Lt. Gov. Dewhurst codify many of these changes and incentivize quality, prevention and patient education as ways to curb costs.

 

Something missing from the forefront of debate has been health education, health reform, scope of practice and mental health services. Loan repayment programs for health professionals have been stymied. The broadening of scope of practice for advanced practice nurses and physician assistants has not received a lot of attention. The Texas Medical Association (TMA) has lobbied against increased scope, citing the shortage of nurses in the state and the need for more front-line practicing nurses in hospitals. Meanwhile the Texas Nurses Association points to the huge shortage of primary care providers in the state and notes that advanced practice nurses could help address access to care issues. 

 

What to do about addressing the need for increased graduate medical education slots in Texas to keep our medical graduates in-state has received little attention. This is likely because it requires funding. 

 

The House budget and the Senate budget diverge in scope. The House's proposal for public schools, higher education, and health and human services is quite austere. The Senate's version of the budget is more generous but still quite lean when compared to prior budgets.

 

The House seeks to use $3.1 billion from the Rainy Day Fund (RDF) to pay off last year’s deficits. The Senate seeks an additional $3 billion from the Rainy Day Fund to support FY12-13 programs. Even though that takes $6 billion from the sustainability fund, it also leaves $3 billion for later use. With the price of fuel going up almost daily, some pundits predict the RDF will replenish that $6 billion by the next legislative session because it is funded, in part, by fuel taxes. One can be sure that the debate on using RDF funds will be long and loud. And, some predict that budget debate will spill over into a mid-summer special session, along with redistricting. 

 

The deadline for bills to move out of committee hearings, through calendars committee and on to the House or Senate floor for action is fast approaching. Less than 35 days remain in this 82nd session of the Texas Legislature. Watch the action carefully because this is when it really gets crazy!

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A Week of Senate Finance Action

Under the leadership of Senate Finance Chairman Steve Ogden and Vice Chairman Juan “Chuy” Hinojosa, this past week witnessed some watershed moments in the legislative process. After three months of testimony, hearings, member discussions and searches for new revenue, the Senate Finance Committee (SFC) pulled together a comprehensive state budget that recommends some $10 billion more in budget expenditures than does House Bill 1 approved two weeks ago.

 

The Senate’s approach to education and health and human services has resulted in a more “favorable” allocation of state funds than recommendations from the House. Yes, there are still a number of painful reductions, but fewer than those proposed in the other chamber. Ogden also called for members to address the structural deficit in the budget — an important step toward a permanent solution to recurring shortfalls.

 

Among the decisions affecting UTMB was the Senate’s proposal last week that funding be restored to the criminal justice health care programs, along with major restructuring of that health care contracting system. The Senate recommendations included:

 

        Restoring almost $200 million of base funding to the program (from $707 million to $903 million) for the biennium. Although this is still 10 percent lower than funding in the 2011 biennium, it is a far less drastic reduction than prior recommendations.

        The recommendation calls for letting the monies appropriated drive the amount of care delivered rather than vice versa. In other words, the health care vendors (UTMB and Texas Tech) would NOT be called upon to provide more care than the state appropriation proposed. The responsibility for the prison’s health care budget would fall squarely on the shoulders of the Texas Department of Criminal Justice, not upon the two university providers.

        The proposal also de-funds the staffing of the Correctional Managed Health Care Committee and calls for the contracting for care to occur directly between the university providers and TDCJ.           

        Budget allocations were recommended specifically for unit-based care, for hospital care, and for pharmacy inventory and operations.

        TDCJ was authorized to move monies among strategies with prior Legislative Budget Board approval to fund additional services should TDCJ deem them necessary.

        Reasonable reporting requirements related to oversight, quality, costs, utilization, acuity and other benchmarked measures were outlined.

 

The SFC recommendation received broad support among its members and was approved unanimously. Senator Robert Duncan told the Austin American Statesman, “We’re doing that so the care isn’t driving the budget, the budget is driving the care.”

 

During discussions related to university funding in Article III of the budget process, Senators Ogden and Tommy Williams offered up a provision for the approval of $11 million in FY13 funding for the debt service of the Tuition Revenue Bond approved by the 81st Legislature. This recommendation was approved in the Senate Finance Committee’s overall budget recommendation.

 

Last week also saw some other interesting proposals designed to allocate funding to the state’s health-related institutions (HRIs). Senator Judith Zaffirini chaired a newly formed Senate sub-committee on fiscal matters, which was charged with identifying funds for the HRIs. 

 

Since there were no general revenue funds available for distribution, the sub-committee proposed liquidating the Permanent Health Fund for Higher Education − the $430 million endowment from the decades-old tobacco settlement set aside for the state’s health-related institutions. The endowment produces about $45 million in revenue each biennium, which is allocated to the HRIs.  The sub-committee recommended that distribution of those funds occur on a formula basis for each of the 10 institutions. In turn, the institutions have the option of directing their portion of the funds to immediate budget needs this next biennium or placing the funds in a continuing endowment under their system’s direct management.

 

Senator Zaffirini opposed the recommendation because, rather than providing the institutions with new monies, it simply distributed to them revenue that had already been set aside for their use. Others joined her, citing the intent of the endowment to provide a perpetual source of revenue to the state’s HRIs. The Senate Finance Committee voted 10 to 5 to recommend the action to the full Senate.

 

House Appropriations Committee Chairman Jim Pitts told the media, “I don’t favor it, and I would speak against it.” He added that, “Once it’s gone, it’s gone.” Pitts did not rule out the fact that he may be persuaded otherwise.

 

UTMB currently receives $5 to $6 million each biennium from the endowment. If it is fully liquidated and distributed, UTMB’s portion of the proceeds using the current distribution formula would be about $47 million.  Like everything in the budget, details of this are still in flux, even if the idea is ultimately accepted in the conference committee. A number of things may change depending on decisions about how much of the fund to liquidate (all or part of it), how to distribute the proceeds, and how much flexibility each institution would have regarding use of the proceeds. 

 

A quick re-cap of funding for health-related institutions, with the Senate version of HB1 compared to the House version:

 

Senate Finance Version

 House Version

5% formula reduction and no American Recovery and Reinvestment Act (ARRA)

10% formula reduction and no ARRA

15% hospital reduction

25% hospital reduction

25% special items reduction

25% special items reduction

$11 million TRB debt service for proposed UTMB hospital tower

No debt service added in bill, but $13.2 million TRB debt service on wish list

$51 million GR to restore ARRA for all health-related institutions (on wish list)

N / A

 

Both bills make substantial reductions in Medicaid, CHIP and other health care funding, but the versions differ in amounts and types of reductions. 

 

Next Steps

 

The Senate plans to complete its work with approval of the fiscal matters bills this week and pass them from the Senate Finance Committee for action by the Senate as a whole after the Easter break. Their agreements later this week have resulted in significant additions to public education ($6 billion), along with a revenue increase of $5.5 billion through fast-tracking collection of fees and taxes, eliminating various exemptions, and selling public lands not being utilized.

 

After the Senate presumably approves the Senate Finance Committee’s recommendations, the House and Senate budgets will move to the Conference Committee.

 

The Speaker and Lt. Governor will each appoint five members to a joint budget resolution committee. These deliberations will likely take members into mid- to late May. If a consensus can be reached, the conference bill goes back for concurrence to each house and if accepted in both bodies, it goes to the Governor.  The Governor can veto specific line items in the budget, veto the whole budget, or sign the budget within 20 days of its arrival on his desk indicating his concurrence. Or, he can do nothing within the 20-day veto period and  the budget will be enacted without his formal approval.

 

If anything in these steps prevents a budget from being enacted by the end of the session on May 30, the Governor will have to call a special session (or two . . . or three) this summer to adopt a budget before the September 1 start of the new fiscal year.

 

After a brief respite for the Easter break, legislators will return to a schedule of non-stop activities . . . and the House will take up discussion of redistricting!

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What a Week!

I began the week with heartburn so bad that I thought I must be having a heart attack. It started late last weekend and progressed. After a quick check-in Monday with one of the world's most brilliant doctors, Dr. Steve Quach, he quickly decided that I had "pill esophagitis" from swallowing doxycycline (antibiotic for acne) without drinking enough water. (Instructions with the prescription are very clear on the need to drink a full 8 oz. of water with the pill.) He predicted that the pill had stuck in my esophagus and eroded it. Go figure!  By the way, why I have acne and am married to a dermatologist is a whole other story! 


Another quick check-in with my ole med school friend Dr. Marc Shabot offered phone confirmation, medication, and some relief. I returned to Galveston Tuesday morning and met Marc's endoscope (must be named "Big Bertha"), and he confirmed a quarter size erosion in my mid-esophagus. I've been chugging meds all week and am well on the road to recovery. And a lot more attentive when it comes to following the doctor’s orders on how to take my medication.


The legislature has been very busy, as legislatures should be. They have passed out emergency legislation requested by the Governor in the first 60 days and have also gotten past those thorny subjects like voter ID. This week has been consumed on the House and Senate sides with more budget issues — past, present and future!  The Senate has held hearings and met in member work groups to review their options for creating their own budget recommendations.

 

Remember that the state health-related institutions are treated more equitably in Senate Bill 1. The Senate has taken an approach to building a budget that addresses the burning issues of education funding and health and human services funding, and that mitigates negative impacts on existing programs. Under the skilled leadership of Senate Finance Committee Chairman Steve Ogden, members have been collegial and deliberate in trying to find realistic ways to solve long-standing problems related to the state's financing methodology.


The House began action Thursday at 0830 with the second reading of HB4, the supplemental appropriations bill. The supplemental appropriations bill called for the expenditure of $3.1 billion from the economic stabilization fund and the use of newly identified revenue and savings to cover the $4 billion shortfall in tax revenue from 2010-2011. The debate was filled with passionate pleas to avoid cuts to state programs that disadvantage the elderly, children, the disabled, schools and other public programs.

 

Sixty-seven amendments were offered by members to add money and programs previously reduced back to former or near-former funding. Rep. Sylvester Turner waxed eloquent in his pleas to "save our nursing homes," and Rep. Mike Villarreal pleaded his case for more money for education by reversing cuts that had been made. Suggested funding for the reinstatements would require use of more Rainy Day Funds. Discussion of the matter followed party lines and lasted for the amount of time allocated; it was then tabled by a predictable party line vote.


HB4 (Supplemental Appropriations Bill) passed the House on its second reading virtually unchanged from its introduction, with three exceptions:

·         Rep. Phil King sponsored an amendment implementing a hiring freeze for vacant state positions.

·         Rep. Drew Darby offered an amendment that reduces funding in the current biennium to the Soil and Water Conservation board.

·         Rep. Strama offered an amendment that moves unobligated funds from the Emerging Technology Fund to the Foundation School program.

All three amendments represented a “new source of revenue” and all three passed.


The final vote FOR passage of HB4 was 100 – 46.

The House then took up the debate on HB275, which relates to use of the Rainy Day Fund (RDF) to fill the gap in the current biennium budget. The debate was fierce and focused on limiting any expenditure from the RDF to just $3.1 billion. Votes followed party lines among those members present, with an occasional "stray" objection. Much like the debate of HB 4, amendments were introduced and quickly tabled after the time allocated for discussion in House Rules. Only one amendment passed, and it was Rep. Zedler's language that makes HB 275 effective ONLY if HB4 or similar legislation is enacted and becomes law, with an effective date of July 1, 2011. This is important strategic move.


House Bill 275 passed with a vote of 142 – 2 approving the use of $3.1 billion from the Rainy Day Fund during the current state biennium.


On Friday morning the House had the third and final reading of HB1 and HB275 and passed both out of the House. It’s official!  The bills now go to the Senate for review.

 

The House took up HB1, the 2012-2013 state budget on Friday morning; it has almost 400 amendments!  The Governor's agreement with the House Appropriations Committee has been that the Rainy Day Fund could be tapped only for the purpose of paying off the state’s debts from the current biennium and not for use in the new state budget. However, this procedure in turn frees up about $4 billion for revenue for the upcoming budget. As previously noted, this allows some restoration of funds — about $2 billion each — for public schools and health and human services.


Adding money to any one appropriation area means taking it away from another area. The pie is only so big. It can be sliced a lot of ways. But unless the pie gets bigger (through new revenue that is not currently available), there is no way to increase funding in the current budget discussion until the budget passes from the House and moves to Senate. 

 

You know the rest of the story. HB 1 passed from the House with only minor modifications, none of which were significant to UTMB. In spite of a “rumor” that UTMB’s disproportionate cuts in its hospital funding had been restored, that was indeed rumor. Although there are still recommendations in Article XI of the bill for restoration, there is no money. Items put into Article XI are often referred to as “the wish list” and usually die on the vine without funding.

 

So what happens now?

 

The House’s work is partially done; another phase will begin shortly.

 

But first, the Senate must wrap up its work and produce its version of the budget. Senator Robert Duncan has been chairing a task force of sorts to identify other sources of revenue to add about $5 billion to the budget. That search has yet to produce a final report. Some say there is just no pot of gold; some say there is no rainbow either! 

 

But those more optimistic individuals (like yours truly) believe in miracles. Certainly if anyone can pull a miracle off this session it will be Senator Steve Ogden.  He has had the fortitude to confront the elephant in the room and spoke last week of the ultimate need to “fix the structural deficit,” referring to the margins tax enacted in 2006 that has failed to produce revenue to replace the state tax cuts enacted that same year.

 

The inevitability of a special session on the budget seems to loom more depressingly on the horizon as each day passes without resolution on this budget.

 

What next?

 

Indeed! What next?

 

On Thursday, the Senate Subcommittee for Health-Related Institutions discussed tapping the decade-old tobacco settlement trust fund, breaking it up into allocations that would provide each health-related institution with some cash in this year’s budget. There are many positives associated with that suggestion (instant cash) — but also some pitfalls (loss of future revenue). More thought and discussion regarding this alternative are inevitable.

 

The Senate will make its final attempt at a budget shortly, and then the two budgets will be brought together into a joint conference committee composed of five house members and five senators for deliberation. Their impossible and unenviable task will be to become King Solomon and determine what is fair and equitable in the budget and decide that which lives and that which dies by the budget axe.

 

Pray for them. 

 

 

 


Definitions:

House Bill (HB) 1:  "The" Budget Bill that lays out the budget for the 2012-2013 biennium.


House Bill (HB) 4:  The Supplemental Appropriations Bill; Texas will finish the current biennium (2010-2011) with a deficit in excess of $4 billion. Deficits by constitutional mandate cannot carry forward; the budget must balance at the end of the year. The Comptroller is allowed to take money from the economic stabilization fund (Rainy Day Fund) and pay all bills by August 31 of the end of the biennium with or without legislative permission. HB4 gives the House's endorsement to what would have been done anyway.


House Bill (HB) 275:  Provides for use of $3.1 billion of the economic stabilization fund for balancing the budget.

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Et tu, Brute?

The Ides of March have come and gone, and so has the midpoint of this 140-day legislative session.  The House of Representatives Appropriations Committee has worked at a feverish pace to produce HB1 and the supplemental funding bill.  These bills have been voted out of committee, gone to Calendars, and been posted for presentation on the House floor.  The bill has been scheduled for reading on the floor of the House and for debate on Friday, and maybe on Saturday, and perhaps even on Sunday!

I thought I would provide for you a “Cliff Notes” version of just where we are from the House viewpoint at this stage of the session.  Remember that changes can be made on the House floor next week.  Also remember that when the bill leaves the House, it moves into a conference committee with the Senate.  Five lucky House members will constitute that House conferees; the same number will come from the Senate.

Recognizing the financial situation Texas faces, UTMB has requested that in HB 1:

  • The university's appropriations be cut by percentages no greater than other health-related institutions’ appropriations are cut, and
  • The university receives Ike restoration funds appropriated or approved last session.

Tuition Revenue Bond Debt Service Funding

o    A $150 million tuition revenue bond (TRB) was passed by the 81st Legislature. Since it was approved late in the session, and since UTMB did not need immediate funding for the facility, debt service for that TRB was not appropriated.

o    UTMB has requested approximately $13 million for TRB debt service during the second year of the next biennium ($150 million at 6% over 20 years).

o    This TRB will be used to construct a Surgical Tower connected to the existing John Sealy Hospital to restore bed capacity to pre-Ike levels and to provide operating rooms and ICU beds to support UTMB’s patient care obligations, including the Level I Trauma Center, and UTMB’s education and research programs.

o    The TRB will be matched by a grant from The Sealy & Smith Foundation of $170 million; bonds and philanthropic sources will cover the remainder of the construction costs.

o    Construction of the Surgical Tower is essential to maintaining current clinical, trauma and educational programs.

o    Funding for the TRB debt service is NOT in HB 1. It must be added to the FY 2012-2013 appropriations bill before or in conference, or be added to the FY 2011 Supplemental Appropriations bill.

UTMB’s Base Appropriations

o    During the 81st Legislative Session, UTMB received a $48-million-per-year adjustment to its base appropriation in lieu of DSH and UPL funds, which go to the state treasury. The base appropriations adjustment helps support UTMB’s services to low-income patients and is crucial to UTMB’s operation of the Level One Trauma Center. These sorts of services are supported at other public tertiary care hospitals by DSH and UPL. 

o    UTMB has requested that the legislature treat appropriations reductions in the same manner as it does other state-funded teaching hospitals, which were reduced by only 10% in HB 1.

o    Reductions of the magnitude proposed in HB 1 (25% to UTMB’s hospital base GR funding) will likely lead to some or all of the following:

    Reduction in services to women and children through UTMB’s Regional Maternal and Child Health Programs, which are located throughout East and Southeast Texas and in border communities,  and which last year served more than 100,000 economically disadvantaged women and children

    Elimination of the contract to serve Central Texas mothers at Austin Women’s Hospital at Brackenridge Hospital, which delivers more than 130 infants per month and provides family planning services

    Reduction in indigent health care services in UTMB hospitals and clinics

    Reduction in post-graduate medical education programs and house staff

    Reduction in available beds to support hospital admissions

    Reduction in services and/or closure of the Level I Trauma Center

o    Preservation of UTMB’s base hospital appropriation is essential for UTMB to continue its post-hurricane recovery and maintain its clinical and educational programs. UTMB is asking the Legislature to reduce its hospital appropriation by no more than the 10% reduction applied to the other state-owned hospitals in HB 1; the final decision to be made in conference committee.

Continued access to HB 4586 funds appropriated in the 81st Legislature for Ike Recovery

o    UTMB received $150 million in General Revenue to be used to match FEMA funds and other Hurricane Ike recovery needs.

    The FEMA damage estimate in May 2009 was $667 million; the current revised FEMA damage estimate is $1.2 billion.

    FEMA requires fund matches at both the 90:10 level and the 75:25 level based upon the type of repair.

    Some damages are not covered at full cost and some are not covered at all by FEMA funds.

o    Since the hurricane, UTMB has been working around the clock with contractors and FEMA representatives to finalize the damage and mitigation cost assessment; however, due to the pace of FEMA approval, the appropriation cannot be fully spent before its expiration date. UTMB is working with the LBB and the Comptroller and will encumber much of the funding by the June 2011 expiration of the appropriation through contracts with major construction vendors.

o    Any funds unencumbered before the HB4586 June 2011 expiration will be swept.

o    UTMB seeks permission for continued access to these funds if it is unable to encumber all of the funds before the appropriation timeline expires. A potential remedy is “re”-appropriation of unencumbered funds in the HB 1 FY2012-2013 appropriations bill or in the Supplemental Appropriations Bill.

Correctional Managed Health Care Contract

o    The state has contracted with UTMB and Texas Tech since 1993 to provide medical care to inmates.

o    The major portion of correctional care services is funded through a baseline appropriation. However, both universities customarily incur care-related expenses over and above their share of that baseline appropriation. These expenses have traditionally been covered by the institutions until a supplemental appropriations request can be approved by the state.

o    As a result, UTMB and Texas Tech have had to carry substantial losses on their books until a supplemental appropriation to cover the deficit is approved; this creates a financial hardship for both university systems.

o    This process also runs counter to existing statute, which states that university funds will not be utilized for offender health care services.

o    UTMB and Texas Tech have both gone on record by disagreeing with the most recent auditor’s report:

    Both universities believe that their health care costs and indirect costs are stated accurately and that they are consistent with community standards.

    Both universities believe that the accounts for all monies used for salaries and contracted services in their delivery systems have been compliant with generally accepted accounting principles, as well as the provisions of the Correctional Managed Health Care Committee contract.

o    The cost of health care in the prison system continues to rise because of:

    Medical inflation(i.e. increased costs for drugs, supplies and equipment)

    Increasing number of older offenders who do not qualify for parole

    Increased acuity and volume of hospitalized patients

    Increased burden of chronic diseases

    Increased use of pharmaceuticals

    Increasing personnel costs

    Expanding mental health services

    Offender litigation

o    UTMB wants to serve as a vendor for hospital and specialty health care, pharmaceutical services, telemedicine, electronic medical records, information systems, and physicians and mid-level practitioners, fully reimbursed for these costs.

o    UTMB must be allowed to adjust the amount of care it provides to the appropriation provided and not expend university educational funds to close that gap.

o    UTMB’s reimbursement for patient care services must cover associated costs, as determined by GAAP accounting standards.

o    UTMB must obtain $51.1 million in Supplemental Appropriations in order to cover the deficits from FY2010-2011. The current Supplemental Appropriations Bill, HB-4, includes $40 million to UTMB for CMC.

o    UTMB must have a new contract with TDCJ that clearly defines roles and responsibilities, with UTMB as a vendor for offender health services sized to fit the appropriation amount.

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Planning for a Texas Health Professions Workforce

More than 10 years ago, the Statewide Health Coordinating Council (SHCC) launched several initiatives designed to improve the method for collecting and tracking the number and demographics of health practitioners in Texas.  It is impossible to predict and address future needs without that information.

As a member of the SHCC from 1997 until 2010 and someone who chaired the council for the past 14 years, I thought the following excerpt from a recently published “Chairman’s Letter” would be of interest — particularly with health care reform on the horizon, the serious shortage and mal-distribution of doctors and other health care providers in Texas, and the state’s budgetary challenges.

Data have shown year after year that Texas is faced with two clear trends: (1) the population is growing faster than almost any other state in the U.S., and (2) the number of health care providers is NOT keeping pace with that rate of growth.

In addition there continues to be major geographic mal-distributions of health care practitioners across Texas. Border and rural areas face the greatest shortages in numbers of health professionals per 100,000 population. And, in spite of significant advances in technology, regulatory barriers have prevented the deployment of telemedicine and other technologies in medically underserved areas, whether urban or rural.

The facts are simple and sobering:

1.       Texas has a shortage of physicians in primary care and specialty care!  Although the state has increased both the number of medical schools and the size of medical school classes over the past decade, there have not been significant increases in Graduate Medical Education positions for the training of these graduates in Texas. The lack of funded GME slots results in Texas graduates going out-of-state to do their residencies. Only half of those who leave Texas to train ever return; in contrast, more than 80 percent of those who graduate from a Texas medical school and complete a Texas-based GME program will stay and practice in Texas. Until Texas makes graduate medical education its priority in health education funding, the state will continue to invest in medical students who ultimately will go elsewhere for residency and long-term practice. It simply doesn’t make good economic sense for Texas to educate physicians who will serve other states when the need here is so great.

 

2.      There is also a shortage of registered nurses in Texas, but there is an abundance of licensed vocational nurses. The scope of practice of LVNs has been severely restricted exacerbating the nursing shortage. Moreover, the shortages of nurse educators and graduates persist despite innovative programs funded in recent sessions by the Texas Higher Education Coordinating Board and the Legislature to support faculty salaries, fast-track programs and student scholarships. Attrition rates from nurse education programs are alarming; even more so are the attrition rates from the profession itself, in spite of significant salary increases over the past 10 years.

 

3.      Unfortunately, shortages aren’t limited to physicians and nurses. The workforce in all the other health professions is woefully insufficient to meet current or future demand in Texas. The well-documented shortages are most apparent in border and rural areas and include pharmacists, physical therapists, occupational therapists, physician assistants, behavioral health professionals, clinical laboratory scientists, radiology technicians, and others.

The Texas population is growing faster than any other state, with more than 400,000 people becoming new Texans every year (half by birth and half by legal immigration). The growth in the number of undocumented immigrants is unknown but thought to be quite significant. The high birth rate in Texas demands increased numbers of obstetricians, midwives, nurses, and pediatricians. The number of pediatric sub-specialists in our state is dramatically below the ratio found in  the U.S. as a whole.

At the other end of the age spectrum, there is an ever-increasing number of Texans 65 and older with remarkable longevity in spite of poor overall health status. These individuals require primary and specialty care services as well. In addition, aging Texans, like their pediatric counterparts, need a vast array of support services, as well as assistance from therapists, pharmacists, nursing care, and chronic disease management experts.

These demographic pressures are compounded by the anticipated impact of national health care reform. Millions of Texans will be added to the current Medicaid eligibility lists by 2014 and others will enter through discounted purchasing organizations. The demand for health care services could increase by as much as 25 to 30 percent in some areas of our state. This will likely overwhelm an already fragile health system.

As the demand for health care services in Texas grows daily, the question is:  How can we meet that demand now and in the future?  We must entertain new models of care that improve access. We must also employ more effective health and wellness programs, prevention programs and educational programs to improve health status. The use of technology will also demand new workforce initiatives.

Boldness and innovation in our thinking and practice may be uncomfortable for some, but they are a necessary step toward a healthier Texas. Without the willingness to change, we will find ourselves with a health system incapable of meeting the needs of any of our citizens—young or old, wealthy or impoverished, urban or rural.

In turn, the productivity of our state will be significantly and adversely affected as more and more Texans find themselves unable to work due to chronic and debilitating health conditions. Maintaining current regulatory and scope-of-practice restrictions will not serve us well. Major reforms in education, regulation, scope-of-practice determination and the use of resources MUST be priorities for our state. Simply put, the status quo is not sustainable.

Texas must embrace a serious re-prioritization of resources in health education, and that education must be interprofessional and interdisciplinary. Graduate Medical Education programs must be placed at the top of the financial priority list. We must determine scope-of-practice boundaries using evidence-based criteria and core educational competencies, with standards for quality and public welfare of paramount importance.

Licensure for the practice of medicine must NOT be compromised. Health care education must become less fragmented and include a career matrix so that professionals share broader bases of knowledge that enable them to migrate among different career paths as their interests and the needs of those they serve evolve. We must educate health professionals collaboratively so that they can practice in team-based models in the future.

Texas must align desired health outcomes with financial incentives and rewards for those practitioners demonstrating evidence-based practice and quality outcomes. Priority must be given to maintaining wellness, for prevention and education programs, and for the management of chronic disease in a manner that reduces unnecessary emergency room and hospital admissions.  

Every year that our state puts off reforming the health professional education and training process is another year that quality of and access to health services deteriorate. Inaction almost guarantees that future assessments will report increasing shortages in the health care workforce, decreased access to services and erosion in quality of life.

Improving the health of all Texans is about much more than adding a new medical or nursing school. It is about a vision for a future in which health care delivery is a shared community responsibility. It requires us to stretch our imaginations and our comfort zones to embrace new technologies and new models of medical practice.

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Another Day in Tinsel Town

After all, it is South by Southwest week in Austin, and there is as much to see in the session as at the annual music festival.

 

The House Appropriations Committee (HAC) waited for over two hours to convene to hear House Bill 1 and House Bill 274 (the budget and the supplemental budget placeholders). 

 

Chairman Pitts called the meeting to order and read a press release from the Governor, Comptroller and Speaker of the House stating their limited support of the use of $3.2 billion of the Rainy Day (or economic stabilization) Fund to balance the current fiscal year's budget.  The message was quite clear that there would be no use of these funds for the forthcoming fiscal year.

 

Why $3.2 billion? 

 

The Comptroller updated her revenue estimate to include an additional $300 million in sales tax revenues. Additionally, cuts in the current budget of over $800 million have been identified.  This means that original estimates of the shortfall ($4.3 billion) have been reduced by $1.1 billion.  Thus, the $3.2 billion pays all remaining obligations from FY10-11. Without supplemental debt having to come from the projected future budget, the House has in effect freed up $4.3 billion for additions to the FY12-13 budget.

 

Proponents of using more of the fund toward the next biennial budget quickly made their displeasure known.

 

The HAC lost no time in designating $2 billion to the foundation school program (which will still face a $7 billion deficit rather than $9 billion). Another $2 billion was designated to Health and Human Services to address shortfalls there (which still leaves a $6+ billion hole in those services).

 

In the crowded, standing-room-only hearing room were media, disabled people in wheel chairs holding yellow signs stating "our homes, not nursing homes," and hoards of others.  The crowd was restless but seemed almost resigned to the fact that the budget that was about to be voted out of committee still had some gaping holes.  Resignation was also apparent on many members’ faces.

 

Although there were tense moments as the Democratic members and the Republican members disagreed, the discussions were civil and filled with probing questions and even occasional puns.  The disagreements ranged from "what got us to this point?" to who is ultimately responsible for the structural deficits that some feel caused the current revenue shortfall.

 

House members are to be commended on their tireless work, patience, and respect for one another’s  viewpoints.  Certainly, Chairman Pitts had a difficult task of consensus building, which he achieved with praise from both parties.  His leadership and ability to listen and respond with compassion and concern is laudable.

 

This was not a joyful journey.  No one seemed overly thrilled with the decisions being made and no one came away feeling like they'd "won."  Discussion of the Health and Human Services budget drew quite a bit of heartfelt comment. Case load growth was not funded in the Child Protective Services budget, as well as a number of other programs for the most vulnerable.

 

My Grandma used to say "never put off until tomorrow that which you can do today!”  Many members adhere to this same philosophy and are seeking more lasting solutions to the problems that have placed the state in such troubled straits.  They are still awaiting that opportunity.

 

Representative Debbie Riddle quickly rose to point out that UTMB’s reductions were much larger than the other health-related institutions and called upon the Legislative Budget Board and subcommittee chairman for explanations.  She also requested additional consideration for the impact of the reductions on UTMB’s post-Ike recovery funding from the 81st Session.  Representative Craig Eiland reminded the committee of the promised recovery funds and cited the adverse impact that such significant cuts to UTMB's budget would have on that recovery.  Both members received assurance from Chairman Pitts that the UTMB issues would be further reviewed and addressed in the form of actions on the House floor and/or in the joint conference committee with the Senate.

 

The budget that passed out of the House Appropriations Committee reduced UTMB’s health care operations (hospital) appropriation by 25 %.  The other state-funded higher education teaching hospitals’ budgets were reduced by 10 %.  Otherwise, the reductions to UTMB are the same as those for other health-related institutions.  No money was allocated to offender health care (CMC), pending further study.

 

In short, the overall reduction in HB-1 as it left the House Appropriations Committee leaves UTMB with an overall reduction of 21% from the FY10-11 funding level. This means $50.2 million would have to be added back to the budget for UTMB to be on par with other health-related institutions.

 

On a positive note, $40 million did find its way into the supplemental appropriations bill as a placeholder amount for the correctional health care shortfalls experienced by UTMB and Texas Tech thanks to the work of Representatives Taylor, Turner and Eiland.

 

Where do we go from here?

 

It’s important that we continue educating members about UTMB’s statewide role in health professions education and clinical care delivery.  Also, it is important to highlight the important role our research enterprise plays in improving health for Texans and people the world over.  The very positive economic impact on the state through UTMB’s education of health care professionals and the forthcoming construction projects associated with Hurricane Ike recovery cannot be overstated.  Friends of the university, students, and alumni should certainly be letting people know about the merits and value of our fine institution. Putting a “human face” with the issues is important for increased understanding.

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A Day in the Life of……

I am frequently asked for more detail regarding just what goes on in Austin during the legislative session.  As I tell our students, “It is a messy process, like watching sausage being made.”

First of all, there is no routine.  The meeting postings are just there as placeholders. Meetings get moved around a lot!  There are plenty of deadlines and tons of activity.  Nothing follows a really set schedule.  Meetings can occur on a few minutes’ notice as long as committee members are informed during the time they are in session.  Designated start times for most meetings are fairly prompt, while some linger on for a while and a few get cancelled (like today’s  7 a.m.).

For the House Appropriations Committee, meetings (a.k.a. hearings) have been starting at 7 a.m. each day with subcommittee hearings on each of the major budget sections.  These meetings last about three hours.  A “bell” rings at 10 minutes to 10 and legislative members have 10 minutes to find their way from the hearing rooms and declare them self present for the House’s general session.

What goes on next is a laborious litany of formalities, introduction of special visiting groups, local and consent calendars, recognitions, announcements, and occasionally at this stage legislative action on bills.   So far this session, the only action on bills has been on the Governor’s emergency list.  Other bills are still working their way from committees to the Calendar Committee and to the floor.

The House usually finishes its business by noon and there is a hurried dash to committee rooms to resume hearings regarding budget or other issues.  Members usually grab a quick bite to eat in their office or in the capitol cafeteria.  Personally, I have not observed any long lunch breaks at glamorous restaurants.  Members are too busy to dine out during the daytime.

Committee meetings go on … well, FOREVER!  Everyone on the committee gets to talk, and invited guests are called to testify on pre-determined subjects.  The process is devoted to educating committee members on the topics / issues at hand so they can make informed decisions when they vote.  The public is permitted to offer input also. Time is allotted for people to sign up to talk in front of the committee. Each person is limited to three minutes of testimony either for or against a particular bill.

Hearings typically wind down around 8-10 p.m., but some last into the wee hours of the morning.  There is much to be done and all too little time in which to do it.  In health care, there is a limited work week for medical house staff because we know that output and thought processes decline after 80 hours in any given work week.  I often wonder if a similar rule should be in place for the Legislature.  

A mirror to all of the activity that I just described is also found for the Senate. The Senate is engaged from early morning until late at night in meetings and hearings and negotiations. 

So what does a typical day for the UTMB legislative affairs team look like?

5:30 a.m.  The day begins by responding to urgent emails.

6:30 a.m.  Park the car and walk up the hill to the Capitol.

6:45 a.m.  Pass through security and find the committee room.  You must arrive early if you want a seat.  Greet friends; exchange information.

7:00 a.m.  Hearing starts. And the day has begun and will be filled with. . .

 

·     Listening and identifying topics of importance while trying to figure out what questions members may be asking your institution when called upon to testify.

·     Keeping a close eye on budget numbers and who is collecting specific allocations of funds (and tracking what they are designated for)

·     Observing, observing, observing!

·     Scheduling meetings with members post-hearing in order to share information related to questions that have arisen during the discussions in committee.

·     Preparing one page talking points that provide clear, concise information on key topics for members and staff.

·     Identifying policy and regulatory changes that could be disruptive to patient care and/or business operations.

·     Maintaining constant communication with our executive leadership on developments that impact our institution and/or our mission.

When the day is done you will know because the Capitol halls will empty and people will retreat to their favorite watering hole for refreshments. We don’t do that; we just go home and prepare for the next day!

Sooner than you think, the day starts again.

Most legislative sessions start slowly and the pace at first is a leisurely one.  This session is anything but that.  The pace is almost frantic.  Information is traveling at warp speed.  The search for more money to fund public education, higher education, human and health services, and other vital programs has been exhaustive.

I have personally listened to so many proposals for reductions of services that I have nightmares about it.  Just how much can you cut from social service programs, from health care, from higher education, and from services for the aged and disabled?  Just how much?  Another $12 million here?  Another $5 million there?

Keep your eye on the outcomes, especially the programs that do NOT get cut.  They likely have a guardian angel!  And ask yourself some questions, like “why?”, “how?” and “who?”

The halls and grounds of the Capitol have been filled with “concerned citizens.”  One day the halls were lined with physically challenged people in wheel chairs who chanted in opposition to proposed reductions in services targeting the department of assistive and rehabilitative services.

I walked out of the Capitol last week and heard the spine-chilling screams of a young man who was deaf and communication-challenged as he tried to express his displeasure about proposed reductions in services to the blind and deaf.  His guttural screams haunted me for the rest of the day. He was surrounded by a throng of people holding signs reading “Save our Schools” and Capitol police officers who looked paralyzed by the scene.

The people and activities at the Capitol are a reflection of Texas.  All ethnicities. All types of attire. Tie-dyed Ts and saris.   Some with shoes; some without.  Some in pinstripe suits and obligatory red ties.  Some in jeans, boots and cowboy hats. And, noise. Lots of noise.  Lots of marching bands playing on the Capitol steps.  Lots of children’s choirs singing in the rotunda. 

Yesterday the Capitol looked like an ant hill with hundreds and hundreds of people holding placards and homemade signs urging the legislature to fund community school programs.  Whole families were present.  Grandmas dined on fried chicken on the steps in front of the south entry.

And there is the “liberty lady.”  A middle-aged, African-American woman who wraps herself in an American flag and wears a headdress like the Statue of Liberty.  She also holds a torch (without a flame).  She never says a word.  She just places herself in various poses around the Capitol grounds as a reminder.

And, I cannot forget the guy in the pink pig suit who stands at the front gate with a sign that says “Some LAWYERS ARE PIGS.”  I have to get his story one day.

Inside, the building is teeming with the same people searching for legislative offices, bathrooms (there are far too few), elevators (there are even less of them), and a voice in the process (there is plenty of that).  Messengers scurry about carrying printed materials (yes, there is email but it hasn’t yet replaced printed working documents).  Formality and civility is the language.  Respect is present. 

This is what the Texas version of democracy looks like.  Even with its occasional faults, it is probably better than that found anywhere in the world, Washington D.C. included.

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Circling the Wagons

It has been a little bit like that old TV series “Wagon Train.” Now if you remember that TV show, you are dating yourself to a time just after a television became an essential household furnishing. Nevertheless, in times of impending trouble, the wagon master would order the drivers to “circle the wagons.” I often wondered what would happen if they just stayed in the circle and continued to drive. Pretty cool idea, huh? Horses are going at full speed, dust billowing up everywhere, but no one really getting to a destination.

Well, I finally got to see the wagons circle and stay in motion this week. It is not all that pretty.

After weeks of discussion, debate, hand-wringing, study, and seriously hard work, the wagons in Austin have pretty much circled (although I think some are still in motion). The House Appropriations Committee (HAC) met last week and heard from the Comptroller, Susan Combs, that the Rainy Day Fund could be tapped to help balance the state’s budget without jeopardizing the state’s bond ratings. With a word of caution, she reminded members that there was no crystal ball guarantee of a reversal in the economy’s downward spiral, nor was there any assurance that money used to address this session’s budget woes would not be needed in the near future (like 2013).

Members of the HAC went back to their subcommittees and continued to look for additional ways to reduce expenses among the myriad of agency budgets they oversee. Remember, our state representatives are very smart men and women who run multi-million-dollar corporations of their own and/or have years of experience balancing budgets in their local communities. Simply put, this is a group of sharp leaders committed to balancing the budget on behalf of the Texans they serve. HAC Chairman Jim Pitts lives and breathes his job. So does his vice-chair, Sylvester Turner. No one party or member has a monopoly on wanting to see our state successful.

In spite of the House leaderships’ efforts to resolve the shortfall, they met this week with virtually the same budget they started with four weeks ago. The circle is complete and the wagons are showing some wear and tear after what has been a painful journey thus far.

The public has for the most part rejected the notion that the proposed budget cuts are a good idea. The $9 billion shortfall in the foundation public school program, with resulting reductions of teachers, programs and educational opportunity, has been a difficult pill for most parents to swallow. The Texas Education Agency leadership painted a bleak picture to the full HAC Wednesday morning during three hours of testimony. At the end, it was clear that reductions in state funding would require local districts to raise local taxes in order to preserve educational resources.

Moreover, the commissioner for the state’s retirement system reported that the system is solvent and doing well, but admitted that reductions in contributions to the state employee (and teacher) retirement programs would have long-term consequences. State Representative Craig Eiland also pointed out that retirees have received only benefit enhancement in the past decade, and that there have been no-cost-of-living increments during that time. He also noted that increased costs for retiree health insurance have contributed to a decrease in benefits and take-home pay.

The issue of higher education finally came up late Wednesday. Specifically, House Bill 1 recommendations for the health-related institutions came before the committee at 5 p.m.  Within 37 seconds, the HAC voted to accept them as originally stated in the bill—meaning, no changes. For UTMB, it means a 25 percent reduction of funding to the hospital. Both State Representative Larry Taylor (who remains the Republican House Caucus Chairman) and Rep. Eiland were present for the vote, although Taylor is not on the HAC. His presence sent a clear message to the members of his interest in the final outcome. The presence of both representatives and their spoken statements also reminded committee members that UTMB wants to be treated on equal footing with other health-related institutions whose funding was reduced by 10 percent, not 25 percent.

So where does all this action, inaction, rhetoric, and shifting of priorities put UTMB?

First, this outcome is not unexpected. The legislature has NO MONEY unless it taps the Rainy Day Fund, raises taxes, or moves funding away from another program! Most members are betting on their ability to obtain enough votes to tap the Rainy Day Fund for about $4.5 billion or more. If that happens, the wagon train will break formation, go back into subcommittees with an allocation of resources, and rebuild budgets. This will be another opportunity for UTMB to address its budget shortfall.

Our legislative delegation in the House will be working to convince their colleagues that UTMB merits their consideration for equal treatment among the health-related institutions in the higher education budgets. How will those decisions be made? This is a complex, exhausting process, but things happen best when committed, hard-working members know that their constituents are concerned and expecting progress.

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And Now, A Word from Our Future

Another eventful week has come and almost gone in Austin. As both chambers continue marathon meetings dealing with the state budget, the House found time to debate the Sonogram Bill that has already passed out of the Senate. With votes largely following party lines, the bill — which was almost derailed by some procedural issues —has continued working its way through the House and awaits its third reading.  Debate has been passionate but civil.  

 

The week also saw a vocal and massive protest against proposed reductions to the Department of Assistive and Rehabilitative Services budget. The halls of the Capitol were packed with clients in wheelchairs, families, attendants and fellow citizens — with an abundance of placards, chants, and rhetoric heightening the passion. 

 

The House Appropriations Committee heard a thoughtful presentation from State Comptroller Susan Combs regarding potential use of the Rainy Day Fund to alleviate some of the deficits for the current biennium. Combs pointed out that legislators had only three choices at their disposal to balance the budget: (1) impose more cuts this current biennium (now); (2) defer some expenses to the coming year; or, (3) use some of the Rainy Day Fund. The Constitution requires the Comptroller to dip into the Rainy Day Fund anyway to balance the budget if the Legislature is unable to do that. At the end of the fiscal year, all of the state’s bills must be paid!

 

Combs confirmed that use of the Rainy Day Fund would NOT adversely impact Texas’ bond ratings or the ability to sell commercial paper on Wall Street. She did advise that the current economy made her cautious about planning for the future and reminded members that there was no assurance that the economy would be booming by the 2013 session.

 

Chairman Pitts introduced a House bill proposing use of $4.3 billion from the Rainy Day Fund to address supplemental appropriations needs, thus assuring the availability of an additional $4.3 billion for budget use during the current budget planning cycle.  On the Senate side, there is a growing call for use of the Rainy Day Fund to infuse more revenue into the distressed budget. 

 

The “T” word also found its way into the media this week, with several members going so far as to suggest that use of the Rainy Day Fund be accompanied by additional taxes. With our state’s historic aversion to taxes, the discussions on this issue should prove interesting.

 

On Tuesday, March 1, 147 UTMB medical, nursing, health professions and graduate students rolled up to Capitol Hill in three buses, disembarked, and presented themselves to the legislative houses to state their case for completing the promised restoration of UTMB from the ravages of Hurricane Ike. Led by new faces on the TMA/AMA student leadership team — Kelli Gross (Chapter President), Lauren Woolbert (Secretary/Treasurer), Toug Tonarttanavin (TMA Delegate), Roxi Radi (AMA Delegate), and Daniel Branch (chief student organizer of the trip) — the group also received lots of mentorship from seasoned veterans like Brian Masel, Michael Leasure, and Samantha Dallefeld. The trip was organized and funded by Friends of UTMB, a group of private citizens who support the university and its mission.

 

The students were met by UTMB’s legislative House members, Craig Eiland of Galveston and Larry Taylor of Friendswood. They posed for the obligatory photos on the east Capitol steps, and received words of appreciation and encouragement from the state representatives. Along the way, Sen. Juan “Chuy” Hinojosa and Dean of the Senate John Whitmire found time to extend their well wishes and encouragement to the group.

 

Students had photo ops in the Capitol Rotunda, were introduced in the House by Representatives Taylor and Eiland, and listened to Senator Mike Jackson praise the impressive diversity, test scores and economic impact of UTMB’s students when he introduced them in Senate chambers.

 

Our students also visited House and Senate members from their home legislative districts, giving them an opportunity to share information about UTMB, their hopes and dreams of becoming health professionals, and the urgency of the need to restore UTMB’s hospitals and campus to pre-Ike status.

 

Along the way, many had opportunities to talk directly with Lt. Governor David Dewhurst and other familiar faces in Texas politics. The day culminated with a press conference in the Senate press room.

 

Students retired to the TMA building’s first-floor reception area and had an early dinner of Texas BBQ. That program featured the chair of the House Higher Education Committee, Representative Dan Branch of Dallas, who spoke about the importance of higher education and medical education in particular. Students had time for questions prior to boarding buses and heading back to Galveston.

 

UTMB’s students are articulate and passionate about their university.  Making that heard in Austin among the dissonance of so many issues is never an easy task. But as I heard post-visit comments and questions from many, I realized just how important UTMB is to them and how strong their feelings are for their future patients. 

 

I am proud of our students and the real difference they make. They aren’t “kids.” They are intelligent, thoughtful and organized, and a formidable force for good. They are our future.

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Interesting Pursuit

Given the limited pot of money, unavailability of the Rainy Day Fund, and significant growth in the number of people needing state services, balancing the budget may seem impossible at times.  However, we have 181 dedicated Legislators and their staff working around the clock to accomplish this difficult task while ensuring the continued health and well-being of Texans.

 

So what happens?

 

Without an increase in the current revenue pool from taxes, the only real option is to increase available revenue by reducing or eliminating current expenditures.  To do that, the Legislature will need to develop a prioritized list, with the goal of preserving essential public services while reducing or eliminating those public services deemed less essential.  This would mean reducing or eliminating the expenditures the less essential programs require.  Overall, it is not too different from the process a family goes through when the household income declines.

  

For Texas, the scenario could look something like this:

 

Start by focusing on services that require most of the state's resources (excluding business/economic growth and development expenditures):

 

·     Health and Human Services Commission (HHS): Maintain existing programs that serve the state's most fragile and vulnerable populations by reducing benefits, lowering reimbursement to providers, and limiting eligibility (assumes no growth in programs)

  

·     Public Safety/Prisons: Maintain “Texas Tough on Crime” policies by keeping the large and growing offender population behind bars but reducing costs associated with infrastructure and maintenance (such as staffing, food, health care, and diversion and rehabilitation programs)

 

·     Education: Reduce state-subsidized programs/services and shift more of the responsibility for education to local communities and families

 

Higher education is particularly vulnerable in this scenario because many view it as a luxury — a personal choice and responsibility — rather than a public good or investment.  What this view doesn’t take into account is the future economic benefit of higher education to the state.  A well-educated workforce is the prime attractor for business growth and development.  Lack of education is one of the key drivers for poverty, crime, and poor health.

 

The Senate and the House face the same challenges.  But each chamber has different priorities.

 

So where do they go from here?

 

Most likely to conference. (For further study, check out Budget 101: A Guide to the Budget Process in Texas at http://www.senate.state.tx.us/SRC/pdf/Budget_101-2011.pdf.)

 

And what will that mean?

  

Both legislative bodies may elect to pass out HB1 and SB1 with little modification from the original bills as filed.  Since there are substantial differences in the two budget bills, the Speaker of the House and the Lieutenant Governor (who leads the proceedings in the Senate) would then appoint a Joint Conference Committee to hammer out a budget that is acceptable to both chambers.  The Conference Committee would also work to ensure that the budget they submit will be acceptable to the Governor.

 

What might that look like?

 

No one really knows, but it could go something like this:

 

Remember that about $4.3 billion of the available revenue for the next biennial budget will have to go toward a supplemental appropriation (which covers emergencies or other needs not covered in the regular appropriations act; in this case, budget shortfalls from the last biennium).  That would reduce the available revenue pool from about $76 billion to $72 billion.  At that point, the Conference Committee might recommend that $4.3 billion be taken from the Rainy Day Fund and used to fund the supplemental appropriation.

 

This scenario would add $4.3 billion to the funds available for appropriation by the Legislature, which would permit our senators and representatives to rethink some of their current reductions.

 

Might that happen?

 

It’s impossible to predict exactly what will happen over the next few weeks, but as the Legislature gets deeper and deeper into the tough decisions that establish budget priorities, there is more talk in both chambers and among both parties about tapping the Rainy Day Fund.  Stay tuned for ongoing developments in the challenging, high-stakes and oh-so-important process of balancing the state’s budget.  

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Correctional Health 101

Keeping pace with the rush of hearings, committee meetings, and sub-committee meetings, the UTMB team met with TDCJ, TYC, and other stakeholder groups for hearings before the House Appropriations Sub-Committee. The House Subcommittee on Corrections is charged with holding hearings on HB-1 funding recommendations for all correctional health care initiatives over the next biennium. 

Let me begin by saying that UTMB has no intention turning its back on the state’s prison health care system. The university is proud of its Correctional Managed Care program and the 3,000 men and women who work day in and day out to ensure that offenders have access to health care. And, UTMB officials look forward to working with state leadership and others toward a contract that makes sense for all stakeholders.  

Now, back to the sub-committee meeting.  UTMB President Callender, William (Bill) Elger, executive vice president for business and finance, and Dr. Owen Murray, vice president for offender health services, addressed a number of questions resulting from the recent State Auditor’s report on UTMB’s Correctional Managed Care (CMC) operations.  In a nutshell, the report had raised questions about: the rate UTMB charges to provide offender care; certain salary adjustments; how UTMB allocates direct and shared costs; charges that appeared unrelated to direct patient care; and the structure of the program as a division within the university.

Mr. Elger took the opportunity to explain how UTMB sets its rates for offender care, noting that the charge for CMC patients is 81 percent less than its allowable rates for regular Medicare patients.  He assured the sub-committee members that UTMB did not use any CMC funds to provide performance-based incentives to eligible employees, and confirmed that offender burials, autopsy services, and meals for security officers guarding patients in off-site hospitals are allowable expenses under the current UTMB-TDCJ contract.  Finally, he clarified that the indirect costs in question had actually been approved in 2006, and noted that UTMB has reduced those costs from $16 million to $8 million over the past four years.

In fact, cost savings initiatives — such as the use of electronic health records and telemedicine, 340B Pharmacy pricing, pharmacy automation and medication reclamation, evidence-based treatment guidelines, and chronic diseases management clinics — have kept the cost of offender care in Texas ($9.88 per offender per day in fiscal year 2010) among the lowest in the nation.  This, combined with excellent health outcomes, has established this state as the place others come to learn how to deliver high-quality, cost-effective, evidence-based correctional health care.

Unfortunately, UTMB can no longer afford to cover the funding shortfall for prison health care while waiting for a supplemental appropriation.  Doing so requires UTMB to tap into general university revenues, which pulls essential funding away from its academic and clinical programs.  

The dialogue continues as we move on to a hearing before the Senate Finance Committee that will focus on a thorough discussion of correctional health care in its entirety.  Clearly a lot of people are now focused on the important task of demystifying a very complex issue and working toward a solution that will benefit all.

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Fast Afoot

The pace is fast and frantic here at the Capitol.

The Senate has worked feverishly on the Governor’s “emergency” legislation agenda and so far has passed legislation on voter identification, the requirement of sonograms prior to abortions, sanctuary cities, and other items.

The Senate has begun hearings related to SB 1 (the Senate base budget).  Health and Human Services, the Texas Department of Criminal Justice and the state’s university systems have all had a chance to make their appeals related to proposed budget reductions. 

Some strategists feel that the proposed reductions are the only way to satisfy the constitutional requirement of a balanced budget.  Others feel that the called-for reductions may place the state further behind in public education, higher education and programs designed to diminish poverty.

UTMB has presented on the anticipated impact of Senate Bill 1 on the future of the University of Texas Medical Branch.  President David Callender thanked the senators for their support during the 81st session.  He respectfully asked them to please honor the promises that they made during the last session to help UTMB recover from Hurricane Ike by funding the Tuition Revenue Bond (TRB). The TRB will require $13 million for debt service for the building of the proposed Jennie Sealy Replacement Hospital after this session.  Dr. Callender also discussed the adverse impact of reductions to UTMB’s base funding.  He explained how the reductions could result in a cutback of clinical services at UTMB hospitals, including the closing of the Level 1 Trauma Center.  Also pointed out was the harmful impact to graduate medical education programs and other selected services throughout the institution.  The impact to education and research programs would be just as detrimental, with UTMB having to place its future growth and expansion of these programs on indefinite hold.

The president asked for fair treatment of UTMB comparable with other state medical schools and consideration for UTMB to meet its mission-specific programs related to education, research and health care.  All are at risk with the proposed large budget reductions.

Next Dr. Callender testified before the House Appropriations Subcommittee on Higher Education chaired by Representative Hochberg.  Chairman Hochberg, along with members Diane Patrick, Myra Crownover, Mike Villarreal and others, were joined by guest members Craig Eiland and Larry Taylor as Dr. Callender discussed the negative impacts of the budget reductions in HB1 (the House base budget).  HB1 proposes reductions of up to 25% in the UTMB hospital budget and eliminates a host of other programs that provide direct service to the poor and underserved, resident and student education programs, and key state health initiatives such as the Stark Diabetes education programs.

During the brief break in the proceedings, Dr. Callender found himself in visits with three senators and several other legislative staff members, and with Lt. Governor David Dewhurst discussing topics ranging from reconstruction of the campus to diversity and student test scores.

The days start at 7 a.m. and most often are busy past 9 or 10 at night.  But there is much work to be done before mid-March. There is that looming March 11 deadline for filing legislative bills.  The legislative bills must accomplish the allocation of the state’s precious dollars as well as providing the means for the state agencies, educational bodies and professionals to change their business practices as called for by the new budget.  Without a doubt these are adverse times but in adversity there lies opportunity.

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Precipitation in Austin

The precipitation in Austin has been intense here of late.  With the introduction of the Legislative Budget Board’s budget guidance, the filing of the House’s budget in HB-1 and the Senate’s budget in SB-1, and now the introduction of the Governor’s Budget it seems to be “Raining Budgets.” And of course there have been plenty of reactions to those budget proposals, like that of UT System Chancellor Francisco Cigarroa and other university chancellors and presidents in testimony to the Senate Finance Committee. 

House Committees were appointed mid-week.  The House Appropriations Committee, under the direction of State Representative Jim Pitts as Chairman and Vice Chairman Sylvester Turner, began its first meeting mere hours after members were named.  They convened at 7 a.m. the next day to hear testimony from the executive directors of the state’s prison system, the Health and Human Services Commission, and the Foundation Schools program.

 

These “big three” account for over 51 percent of the state’s expenditures. As Tom Suehs, executive Director of HHSC, pointed out in his prepared testimony, the choices are difficult. Mr. Suehs is challenged with the daunting task of providing services to the state’s most fragile and marginalized citizens, from the very young to the elderly, from the reasonably healthy to the most severely disabled. Services to the mentally ill, the mentally challenged, the disabled, the frail elderly, ill neonates and Texans with TB, HIV and other diseases — all are facing “priorities” (another word for reductions).

It is understandable that people are anxious about what tomorrow may bring. With the presentation of so many different budgets and impact statements, it is easy to get confused as to where we are in the process.

We are currently in the information-gathering and planning phase of the political process, in which the legislators write the state budget and the laws that govern the budget in action. Right now there is a lot of analysis going on as the legislators work to have a shared understanding of just how the state budget dollars are used and what kind of return on investment the state gets for the dollars. Having a clear perspective of how the people of Texas are served by and benefit from these dollars is vital. Developing this perspective is the focus of the various committee and sub-committee hearings that are currently under way. And it is hard work.

For instance, the prison system accounts for roughly $5 billion in expenditures. Surely a budget of this magnitude can be reduced significantly. But making cuts is not as easy as one might think. The U.S. Supreme Court has set the standards for offender care and those constitutional standards must be followed if Texas is to avoid paying a high price for non-compliance—such as lawsuits or even the possibility of federal supervision of its prisons. And this budget includes many of the programs designed to save money by increasing rehabilitation and decreasing recidivism. Corrections Committee Chairmen Jerry Madden in the House and Criminal Justice Chairman John Whitmire in the Senate have worked for years to establish one of the most outstanding offender diversion and rehabilitation programs in the nation, for which both were named outstanding legislators of the year in 2010 by Governing Magazine. Their modest investment in offender rehabilitation through drug and alcohol treatment in community programs has saved the state hundreds of millions of dollars by keeping these individuals OUT of prison and decreasing future offenses. Should these programs be cut to save money? To do so would be throwing the baby out with the bath water. But what does one cut in order to achieve the necessary savings? The choices are difficult, indeed, and they play out in countless areas of the state budget:  education, health care, public safety, transportation, parks, social services, and on and on.  Close a park, save a school? Close a college program, save another? Setting priorities is hard work. And determining just who should set the priorities is a major part of the task.

The next few weeks will be filled with long hours, an infusion of vast amounts of testimony and information, and unsettling stories of what lies ahead. The challenge is to make sense of this incredible collection of data, facts and speculation and prepare for the next stage of the political process—decision-making. Texas Senators and Representatives are eager to understand the priorities and concerns of their constituents. Now is the time for citizens to let their voices be heard on the issues that impact them the most.

The forecast for the decision-making phase is complex, thorny, hazardous and humbling. Too soon the time will come when attention must shift from information-gathering to settling on priorities, finalizing those difficult choices and allocating resources dollars. And part of this decision-making process must include appropriate legislation that enables agencies, institutions and professionals to put into action that which has been decided and funded.

There is much at stake for the future of Texas. It is important that we not get confused and that we not give up. This is the time to be clear of our mission and vision for the future. This is the time when we come together to build a Bridge Over Troubled Waters.

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The Big Chill

There was definitely a big chill in the air as Tom Seuhs, Executive Commissioner of the state’s Health and Human Services Commission, presented his services budget to the Senate Finance Committee. Suehs’ agency is so complex and diverse that its budget rivals the budget of most smaller states in the U.S.  With everything from Maternal and Child Health to the Department of Aging and Disability Services (DADS), Suehs is constantly faced with trying to please (or appease) a variety of constituents and special interest groups.  His scope of services must provide health care and social services for Texans from “cradle to grave” while dealing with limited state resources and ever-changing federal and state regulations.  His job is not one that most people actively seek out.  In spite of the difficulties, the commissioner is an excellent leader who has approached his budget with a pledge to keep reduction of services to the barest minimums possible.  You can view the Department of State Health Services Presentation to the Senate Finance Committee at this link http://www.hhsc.state.tx.us/news/presentations/2011/Finance-Committee-0211.pdf.

In spite of the freezing weather, some observers claim there has been a bit of a thaw in the frozen Rainy Day Fund option.  Or the perceived thaw might have been steam rising from some of the testimony and extended discussions among members as the reality of the impact of budget limitations became more apparent.  It is painfully clear with every passing day that the spending reductions required by the established parameters* will have far reaching consequences.

Politics is like that, isn’t it?  There is always a bridge to build between campaign promises and the reality of the legislation-making process. Our legislators are held accountable by their constituents for the political positions that got them elected.  At the same time neither the legislator nor the constituent wants to be the one to “kick granny out of the old folks home,” raise college tuition to levels the average family can’t afford, overcrowd classrooms by requiring teachers to teach as many as 40 students at a time, or let convicted criminals go free to bring down prison costs.

There are more chilly days ahead.  The committee work is intensifying with heavy schedules of proceedings, analysis, negotiations and decision-making.  It’s hard.  You Can’t Always Get What You Want.

*No new taxes, no Rainy Day Fund, stay with comptroller’s projected revenue

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Following the Bouncing Ball

As the budget deliberations progress in Austin, there are some provisions that we need to monitor closely because of their potential impact to UTMB:

General revenue base funding was reduced as follows:

  • 10% reductions for formula funding for all the state’s health-related institutions
  • 25% reduction for UTMB’s hospital and “special items” such as home dialysis, Area Health Education Centers, institutional enhancement, primary care and indigent care

No Tuition Revenue Bond debt service was included in the budget for any institution; one of UTMB’s priorities this session is securing TRB debt service funding toward the proposed surgical care tower to replace the current Jennie Sealy Hospital.

30% reduction in funding for the JAMP (Joint Admission Medical Program), which has aided UTMB in recruiting a diverse student body

Elimination of funding for

  • Primary Care Residency Education
  • Family Practice Residency Support
  • Preceptorship Support
  • Professional Nursing Shortage Reduction Program
  • Physician Education Loan Repayment Program

Changes to Correctional Manage Care

  • Elimination of the Correctional Manage Health Care Committee
  • Direct contracting for health care delivery systems with TDCJ
  • Reduction of the current funding by $226 million, or 24%
  • Reduction of funding for Texas Youth Commission services by 23% ($8.3 million)
  • Setting hospital charges to base Medicaid rates

No continuation of funding for the Department of State Health Services UT Diabetes Outreach program

$90 million of the previously appropriated “Ike Recovery Fund” would be lapsed and would  require repeat special appropriation (UNLESS the university can encumber the money through contracts for campus construction prior to June 13, 2011)

The state budgeting process involves detailed considerations, debate and negotiation. We all need to be engaged in the process every step of the way. The evolution and final outcomes of the 2012-2013 biennium budget will have an important impact on UTMB’s future.

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Grandmother’s Insight

My grandmother used to say “Be careful what you ask for — because you just might get it!”

I imagine that is what many people are thinking at this moment. It is pretty easy to speak in political parables and tell other people what they ought to do, but to walk the talk is a bit harder. 

It is time to stop for a moment and critically assess just what the state government does that is worth continuing and what it does that can be eliminated. That is exactly what the proposed 2012-13 budget is intended to do. It is a starting point for everyone. It calls for a time of reflection, for setting priorities, and for serious thought about future impact.       

In House Bill 1 (HB1), total proposed spending for the state in the 2012-13 biennium is $156.4 billion. This is a reduction of $31.1 billion, or a 16.6% reduction from the 2010-2011 level. The recommended state general revenue spending is $79.3 billion, an overall reduction of 10.4 percent. Furthermore, to pay for the deficit accumulated from the prior year before reductions were ordered, another $4.3 billion must be subtracted from available funds.

The proposed budget does not include growth in population or expansion of services. There are no incremental funds allocated to address an increased number of students in schools, increased numbers of enrollees in state programs such as Medicaid, or other related growth in state services and programs. Reductions vary from one section to another of the state budget, which is divided into “Articles”. Health and Human Services direct service programs related to Department of State Health Services, Department of Aging and Disability Services, Mental Health Services, and others are reduced heavily. Provider payments in the Medicaid program have a significant reduction of 10%.

The State’s higher education institutions and public education programs, already suffering from disproportionate reductions in prior months, have also been targeted for additional cuts. Formula funding for higher education and medical schools is reduced by 10 percent and special items were reduced by 25 to 40 percent. Some institutions and programs are eliminated entirely.

Senate Bill 1 (SB1) reflects parallel treatment of most agencies but cuts less deeply into higher education and special items such as hospitals.

Both bills offer up large reductions in funding for the state’s correctional managed health care programs with reductions ranging from 14% to 36% in funding categories.

One has to remember that HB1 and SB1 are both STARTING POINTS. There will be much debate and much discussion about the proposed budget reductions. The Senate and the House will attempt to establish priorities for funding through consensus. Programs with value and with strong return on investment will most likely be the ones that experience fewer final budget reductions.

For the next few months, there will be daily discourse in Austin and over the state. Public input is essential and highly desirable.

And as Grandmother used to say, “You’ll sit a long time with your mouth open before a roasted chicken will fly in.” If there’s a problem, try to fix it. We are all part of the solution.

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Swearing in Austin!

There’s been a lot of it in Austin over the past couple of weeks.

First, the state watched as the Governor and Lt. Governor were “sworn” into office on the Capitol steps.  The inauguration events were scaled down this year as compared to prior events in deference to the economic issues facing the state.

The next “swearing” began just hours later when members of the House and the public got their first look at the Legislative Budget Board’s recommendations regarding the revenues and interventions for the budget. 

Then the real “swearing” reached fever pitch when the Legislative Budget Board’s Recommended House Bill 1 was published and everyone got a good look at the impact of the proposed budget (994 pages of detail).  Chairman Pitts (House Appropriations Committee) presided over a one-and-a-half -hour explanation of the proposed budget’s evolution to House members.  Not surprisingly, the program reductions and eliminations that would be required with passage of HB1 gave members of both parties indigestion.  

The “swearing” continued when the Legislative Budget Board’s Recommended SB1 was published five days later (997 pages of detail). The enormity of the task of crafting the Texas 2012-2013 biennium budget is now a very sobering reality.

The “rules” or guidelines set out by the executive branches of Texas Government and the Legislative Budget Board members were plain and simple:

  1. Build a budget with NO NEW TAXES!
  2. Build a budget that DOES NOT utilize any of the “Rainy Day Fund!”
  3. Build a budget that “lives within the state’s revenue forecast!”
  4. Build a budget that focuses on “less government!”

And, that they did!  You can access both HB1 and SB1 at www.lbb.state.tx.us .  They are worth review.  You can also refresh your knowledge of the Texas Legislative Process with the aid of a summary process chart found at www.tlc.state.tx.us/gtli/legproc/diagram.html.

Lt. Gov. David Dewhurst appointed senators to committees late Friday afternoon.

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Doom and Gloom Galore! But hope still alive for a balanced budget!

The 82nd Legislative session got off to a somewhat gloomy start Tuesday.  After the budget projections issued on Monday by the Comptroller, the mood was not exactly bright.  As the reality sets in upon everyone, the work yet to be done in the next 139 days seems overwhelming.  Yet there was optimism among the members of both houses and affirmation of a desire to work out reasonable solutions to the economic issues that plague all states across the nation.

Rep. Joe Straus getting sworn in as Speaker of the House

The House re-elected Speaker Joe Straus of San Antonio to preside over the session after other candidates withdrew their names from consideration with a recorded vote of 132 to 15.

In his address to the House, Straus said, “I’ll do my best to empower members so that they can do what is right for their constituents and the people of Texas. I know that in recent weeks, members of the House have withstood threats, harassment and attempts at intimidation because of the fair and respectful way in which you want this House to operate. Division, threats of retribution, attacks on people’s religious beliefs, distortions of people’s records, have no place in this House.”

Straus said that the legislature should seek to “rebuild trust by the way we treat others,” to set high ethical standards and to make Texas government live within its means.  He challenged the House to a “spirit of boldness” and reminded everyone that “men who exist get overrun by those who act.”

Galveston County’s own State Representative Larry Taylor guided the state GOP House caucus toward a peaceful resolution of conflicting opinions in the Speaker’s race as well as a number of other issues.  As chairman of the House Republican Caucus, Taylor manages much of the “behind the scenes” work for the majority party.  His quiet but firm hand provides a strong leadership presence that many fail to appreciate unless they are intimately involved in the process.

Meanwhile, in the Senate Chamber, Senator Steve Ogden was elected by his colleagues as the President Pro Tem of the Senate.  Speaking about the budget challenge Ogden said, “We can get the job done.  It will not be easy.  It will not be painless.  But we can do it.”  Ogden also mentioned public education funding and the state’s Medicaid program, saying, “It is impossible to balance the budget without making cuts …”  Ogden implied that both public school funding and entitlement programs were both in need of major legislative reform efforts.

Governor Rick Perry issued an executive order for the Legislature to take priority action on sanctuary cities and personal property rights (eminent domain).  Legislation on these items would have to occur within the first 30 days of the session.

Over the next week both houses will confirm their rules for operations, committee assignments will be made, and a version of the proposed budget will be released by the House and by the Senate.  Bills will be filed, hearings will be scheduled, and the process will move forward at an alarmingly fast pace.

UTMB has its legislative agenda focused on four primary goals for the 82nd session:

(1)  Maintenance of UTMB’s base General Revenue (GR) to support operations of its clinical programs and schools

(2)  Continued access to the $150 million Ike Recovery funds appropriated in the 81st Session for campus recovery

(3)  Debt service for the $150 million Tuition Revenue Bond passed in the 81st Session for the construction of the proposed Jennie Sealy Replacement Tower, and

(4)  A revised contract for Correctional Health Care Services which limits UTMB’s financial losses in that program

UTMB will also focus on the health care regulatory items that impact delivery of care to patients, the funding of state Medicaid programs, health professions workforce initiatives, and a host of related health care reform topics.

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The Dawning of the 82nd Legislative Session

The 82nd Legislature officially convenes itself for the next 140 days to conduct the people’s business today.  If the past 23 hours of political intrigue is any indication, the session will hold plenty of surprises and intrigue.  Texas Comptroller Susan Combs delivered a revenue estimate that took even the stout of heart by surprise predicting as much as $26.8 billion deficit.  A variety of pundits have weighed in over the day as the estimate undergoes additional analysis with some suggesting that the “real” number may be as low as $14 or 16 billion while others say Combs may be optimistic and the deficit may be even greater.  It all really depends on just how much money the state wants to spend and “on what” that money is spent. 
 
To add to the political drama, former Congressman Tom Delay had his day in court and earned himself 3 years with the feds; this time not in the House office building but another federally run facility.  Of course, that opinion will be appealed and delayed (no pun intended) for as long as possible.
 
And before the day was over, Galveston County’s own Larry Taylor conducted the poll of the GOP caucus and as the sun set it appeared that Speaker Joe Straus had more than enough notes to easily be reelected to his position as Speaker of the House.
 
What a day!
 
Now the 82nd Legislature will get down to business.  On the top of their agenda, of course, is finding a way to balance the state’s budget (which is constitutionally required).  And, it is likely that initial discussions will include “no new taxes” and that the much talked about Rainy Day Fund will be left out of play for as long as possible (which the expectation of it being needed in the 83rd session).  Expect a stark budget to emerge … perhaps a skeleton designed to maintain only the most basic requirements for operation of the state.
 
On the crowded agenda will also be congressional redistricting with Texas gaining four new seats in the US congress.  Drawing all those new lines will take some time and result in a minimal amount of horse trading since the Texas House has 101 members — and absolute majority.  Expect no controversy (if you live in a dream world).
 
Save room on the plate for a few more items of interest:  funding for public education, funding for higher education, funding for health and human services, health care services such as SCHIP and Medicaid, criminal justice and its correctional health care programs, border security, immigration, voter ID, scope of practice in medicine  …. to name just a few.  
 
As the football bowl games wind down the real “play off” will be occurring in the Texas legislature as our elected officials make decisions that will determine the fate of our state over the next several decades.  In health care education, we know that the stakes are high.  Maintaining the absolute best quality of education is a task that requires constant and strategic investment; it does not happen by chance.  Educating and retraining health care professionals to practice in Texas is also no trivial task.  We must invest in increasing our state health professions school graduates, and we must also increase the investment in graduate medical education in Texas.  All of that takes money. 
 
Choices will be made.  Let’s hope they are focused on the future.

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Welcome to the UTMB HPLA “Ben’s Blog”

Hello World! This is my first blog post from UTMB’s Office of Health Policy and Legislative Affairs. There is a lot going on at the moment in the world impacting academic health science centers. Health Care Reform. Workforce Development. Research. Patient Care. Safety. Quality. Costs and Reimbursements. Consumer Protection. Legislative controversy as well as opportunity exists at the federal and state levels. There is much to talk about, to speculate on, and to discuss.

Over the next few months (or years) it is my hope that we can share some information, develop some policy discussions, and critically review potential legislative solutions that impact health science centers and the future of our state, nation and world’s health.

Ben

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