Fiscal Year 2017 Draft Budget Presentation Central Health Board of Managers; Budget and Finance Committee July 20, 2016 Jeff Knodel, CFO Dr. Mark Hernandez, Community Care Collaborative CMO
1
Our Mission: Esma’s Story
Esma Kitchum, Patient, Central Health Southeast Health & Wellness Center Esma will be featured in an upcoming episode of our podcast “Central Health Stories.” www.centralhealthstories.org
2
FY16 Achievements & Improvements
3
Our Mission: FY16 Achievements
Community and Partnerships • Increased enrollment in Affordable Care Act insurance by 11.5% to 73,093 • Sendero Health Plans increased IdealCare enrollment • Creation of Healthy ATC partnership with county and city • Community Health Champions launched in January with 58 enrolled • Welcoming of Dell Medical School’s inaugural class
Stewardship • Maintaining lowest tax rate among major Texas hospital districts • Funding for 33 Delivery System Reform Incentive Payment (DSRIP) projects • Achievement of 96% success on Demonstration Year 4 DSRIP projects • On target to achieve over 90% of DY5 DSRIP goals
4
FY16 Infrastructure Improvements
5
• January – Health and Wellness Center at Huston-Tillotson University
• February – Central Health Southeast Health & Wellness Center expansion celebration
• March –ATCIC Mental Health Crisis Center groundbreaking
• April – People’s Community Clinic grand opening
• June – Dell Medical School welcomes its inaugural class
FY 16 CCC/IDS Progress
Delivery System Transformation • Specialty care
– Additional access: orthopedics; urology – Primary care physician-to-specialist consultations – Reduced wait time in pulmonology and urology
• Obstetrics (OB) redesign IT Initiatives • Organized Health Care Arrangement (OHCA) • Successful data center move • Retinal Scanning equipment and remote diagnostic
evaluation tool installed at CommUnityCare and Lone Star Circle of Care
6
7
FY16 Budget Summary Where we ended up
8
FY2016 Central Health Sources and Uses Summary - no changes as presented in the 5-year forecast
FY2016 Approved Estimate
Sources of Funds Property Tax Revenue 160.7 160.7 Seton Lease Revenue 34.4 34.4 Other Revenue 2.0 3.0 Total Revenues 197.1 198.1 Contingency 98.7 95.3
Total Sources of Funds 295.8 293.4
Uses of Funds Healthcare Delivery 286.1 247.6 Administration 8.3 8.3 Tax Collection 1.4 1.4
Total Uses of Funds 295.8 257.3
Ending Balance – Contingency Reserve - 36.1
Inmillions
FY16 Central Health Estimated Year End Conclusions
• Central Health continues to utilize the financing mechanism of Intergovernmental Transfers (IGTs) to maximize our local dollars and transform care.
• IGT timing issues will be resolved by end of fiscal year.
• IGT amounts are still unpredictable.
• Contingency Reserve ending balance: $36.1 million
9
FY17 Proposed Budget
10
Central Health Funding Model – The Big Picture
11
$ $$$
$$$
12
FY17 Strategic Plan Initiatives
Transforma)on
CCCSpecialtyCareImprovement CCCBenefitPlanRedesign CCCBehavioralHealth—SubstanceUseDisorderServices Continue Women’s Health Services Redesign Payment Reform
Stewardship CentralHealthBrackenridgeCampusRedevelopment AffordableCareActSubsidyProgram CCCDeliverySystemReformIncenEvePayment(DSRIP)DeliveryYear6
Partnership Medicaid1115WaiverRenewalPlanningCollaboraEon CentralHealthEquityPolicyCouncil DellMedicalSchool
Central Health FY17 Proposed Budget
DESCRIPTION FY 2016 APPROVED BUDGET
FY 2017 PROPOSED BUDGET
TAX RATE 0.117781 0.111516 SOURCES Property Taxes 160,705,076 172,905,808 Seton Lease Revenue 34,371,988 27,209,925 Interest 400,000 400,000 Tobacco Litigation Settlement 1,600,000 1,800,000 Subtotal Revenue 197,077,064 202,315,733 Contingency Reserve 98,700,000 36,100,000
Total Sources 295,777,064 238,415,733 USES Healthcare Delivery 286,088,392 227,657,916 Administration 8,262,466 9,271,226 Tax Collection 1,426,205 1,486,591
Total Uses 295,777,064 238,415,733 RESERVES (ending balance) Capital - - HMO Risk-based Capital Reserve - - Contingency Reserve - - Emergency Reserve 28,515,000 29,865,000
Total Reserves 28,515,000 29,865,000
13
Central Health FY17 Proposed Budget Overview • FY 17 healthcare delivery budget is significantly less than FY16 due to the
resolution of IGT timing issues which are included in the contingency reserve. All Intergovernmental Transfers (IGT) delayed from the prior year will be made in FY16, thus reducing the contingency reserve moving forward into the FY17 Central Health budget.
14
• Employee Pay-for-Performance increases assumed at 3% • Employer health insurance benefits for employees are assumed to
increase by 6%
FY15 FY16 FY17 Proposed
Total Healthcare Delivery 259.1 286.1 227.7
Less Contingency Reserve 76.5 97.1 30.4
Net Healthcare Delivery 182.6 189.0 197.3
15
Tax Rate Discussion
5-Year Forecast - 4.5% over Effective Property Tax Rate Year Over Year
$0$20$40$60$80$100$120$140$160$180$200$220$240
FY17 FY18 FY19 FY20 FY21
TotalSources TotalUses TotalReserves EmergencyReserve
FY 17
Proposed FY17 FY18 FY19 FY20 FY21 Total Sources 202.3 200.9 196.0 207.5 219.0 230.9 Total Uses 208.0 207.3 212.4 212.0 217.4 225.7 Total Reserves 61.7 59.6 44.2 40.2 42.6 48.6
16
Central Health Property Tax Impact Statement TCAD appreciation 2015-2016
17
Actual Appreciation
Rate Home Value Homestead
Value
4.5% Over Effective Tax
Rate Tax Bill Annual Inc/
(Dec) % Inc/(Dec)
- 200,000 160,000 0.1264 $202 - -
- 300,000 240,000 0.1264 $303 - -
- 400,000 320,000 0.1264 $404 - -
- 500,000 400,000 0.1264 $506 - - 9.2% 218,400 174,720 0.117781 $206 $4 1.8% 8.7% 326,100 260,880 0.117781 $307 $4 1.3% 8.0% 432,000 345,600 0.117781 $407 $3 0.6% 7.5% 537,500 430,000 0.117781 $506 $1 0.2% 9.2% 238,493 190,794 0.111516 * $213 $7 3.4% 8.7% 354,471 283,577 0.111516 * $316 $9 2.9% 8.0% 466,560 373,248 0.111516 * $416 $9 2.3% 7.5% 577,813 462,250 0.111516 * $515 $9 1.8%
FY 2
015
Bas
elin
e FY
201
6 FY
201
7
*EsEmated
In the News: Challenges Facing Major Texas Hospital Districts
18
….......................
….......................
….......................
….......................
….......................
….......................
Percentage Share of Travis County Taxing Jurisdictions - FY16
19
21.2%
16.39%
52.93%
4.84%
4.63%
CityofAusEn
TravisCounty
AusEnISD
AusEnCommunityCollege
CentralHealth
Major Texas Hospital Districts: FY2016 Tax Burden Comparisons
20
Major Texas Hospital Districts: Debt Principal and Payments
21
$730 million in FY 2015 DEBT PRINCIPAL $ 8 million in FY 2015 DEBT PAYMENTS
$12.31 million in FY 2015 DEBT PRINCPAL
$1.37 million FY 2015 DEBT PAYMENTS
Major Texas Hospital Districts: Debt and Pension Comparisons
22
23
Sources of Revenue
Central Health - Sources FY17 Proposed Budget
24
DESCRIPTION FY 2016 APPROVED BUDGET
FY 2017 PROPOSED BUDGET
TAX RATE 0.117781 0.111516
SOURCES
Property Taxes 160,705,076 172,905,808
Seton Lease Revenue 34,371,988 27,209,925
Interest 400,000 400,000
Tobacco Litigation Settlement 1,600,000 1,800,000
Subtotal Revenue 197,077,064 202,315,733
Contingency Reserve 98,700,000 36,100,000
Total Sources 295,777,064 238,415,733
Taxable Assessed Values with % Change Over Prior Year (By Tax Year)
25
-10.0%
-5.0%
0.0%
5.0%
10.0%
15.0%
20.0%
0
20
40
60
80
100
120
140
160
180
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
TaxableAssessedValue %YOY
Central Health Tax Rate per $100 of Taxable Valuation
26
7.79 7.797.34
6.93 6.79 6.747.19
7.89
7.89
12.9012.64
11.78
11.15
4.00
5.00
6.00
7.00
8.00
9.00
10.00
11.00
12.00
13.00
14.00
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017(Est.)
Cents
FiscalYear
Projected Seton Lease Revenue from UMCB
27
0
5
10
15
20
25
30
35
40
FY15 FY16 FY17 FY18 FY19 FY20 FY21
(in millions of dollars)
Major Initiatives FY17
• Expanded Central Health ACA premium subsidy strategy
• UMCB Campus Redevelopment • Begin Implementation of FY17-19
Strategic Plan
28
Affordable Care Act (ACA) Subsidy Worksheet
29
SlidingFeeScale(SFS)Pa)entsbetween101-150%FederalPovertyLevel(FPL) Estimate of eligible SFS patients between 101-150% FPL 5,400
Estimate of enrollment rate 60%
Estimated ACA Enrollment 3,240
Average Annual ACA Premium Cost $519 $1,681,421
Average Annual SFS Claim Cost $1,607 $5,207,976
Potential Reduction in Unfunded Cost $3,526,555
Travis County Health Care Coverage Eligibility—Proposed FY17
30
31
FY17 Uses of Funds
Central Health - Uses FY17 Intergovernmental Transfers
32
• FMAP Decrease in 2017 – larger proportionate share of local match
• Increase In Disproportionate Share for amounts previously funded by State
Intergovernmental transfers: FY 2016 FY 2017
IGT - Private UC 27,900,000 27,900,000
IGT - Public UC 28,700,000 25,000,000 IGT - Disproportionate Share 23,300,000 32,500,000
IGT - CCC DSRIP 28,530,000 29,300,000
IGT - Seton DSRIP 25,670,000 26,250,000 IGT - St. David's DSRIP 600,000 620,000
Total 134,700,000 141,570,000
Central Health – Uses FY17 Health Care Delivery Operations
33
DESCRIPTION FY16 APPROVED BUDGET FY17 PROPOSED BUDGET Subtotal Intergovernmental Transfers 134,700,000 141,570,000
Healthcare Services Member Payment to CCC 26,245,166 26,245,166 Charity care - Seton 4,251,733 4,251,733
Initiatives: ACA education and enrollment 1,745,000 2,745,000 Health Promotion 353,713 353,713
Subtotal Initiatives 2,098,713 3,098,713 Subtotal Healthcare Services & Charity Care 32,595,612 33,595,612 Service expansion 3,300,000 2,000,000
Subtotal Healthcare Services & Service Expansion 35,895,612 35,595,612 Personnel Expenses:
Salary & Fringe Benefits 2,976,926 3,763,563 Operating Expenses: UMCB Redevelopment Operations 0 2,047,675
Legal 25,000 25,000 Consulting 334,000 234,000 Primary Care - Planned Parenthood 585,000 585,000 Integrated Care Collaboration (ICC) 617,275 617,275 Other professional services 168,471 519,271 Marketing & community relations 11,500 23,500 Leases, security & maintenance 799,444 894,847 Phones, computer equipment & utilities 578,507 703,029 Printing, copying, postage & signage 164,344 194,269 Travel, training and professional development 35,539 34,339 Other operating expenses 196,151 207,369
Subtotal Operating Expense 3,515,231 6,085,574
Central Health - Uses FY17 Health Care Delivery Operations
• ACA Subsidy • Medicaider • MAP On-line Application • MAP Texting/messaging • UMCB Campus operations
– VP of Redevelopment/Facilities – Redevelopment Project Manager – Campus Operations
34
ACA Subsidy Initiative
35
FY 2016 FY 2017 proposed Public Information and outreach 300,000 150,000 Education, Enrollment & Advocacy 465,000 465,000
Subsidy (A) 980,000 2,130,000
Total 1,745,000 2,745,000
(A) Subsidy includes: • CHAP • HAAM/SIMS Partnership • SFS 101-150% ( New in FY 2017)
UMCB Redevelopment
36
Building Operations 947,883 Parking Operations 369,792 Marketplace Planning 330,000 Innovation Zone 250,000 Contingency 150,000 Total 2,047,675
Central Health - Uses Fy17 Reserves/Debt Service
37
DESCRIPTION FY 2016 APPROVED BUDGET
FY 2017 PROPOSED BUDGET
Subtotal Intergovernmental transfers 134,700,000 141,570,000 Subtotal Healthcare Delivery Operations Operating Expense 3,515,231 6,085,574
Reserves, appropriated uses & transfers: Transfer to capital reserve 3,000,000 1,500,000 Transfer to emergency reserve 2,539,279 1,350,000 Sendero risk-based capital 5,000,000 6,000,000 Contingency reserve appropriation 97,092,539 30,420,364
Subtotal Reserves, appropriated uses & transfers 107,631,818 39,270,364 Debt service:
Debt service - principal retirement 950,000 975,000 Debt service - interest & amortized costs 418,805 397,803
Debt service 1,368,805 1,372,803 Total Healthcare Delivery 286,088,392 227,657,916
Central Health - Uses FY17 Reserves/Debt Service
• $1.5 million - Capital Reserve – $500,000 CommUnityCare medical equipment – $500,000 Facilities – $500,000 IT equipment
• $1.35 million - Emergency Reserve to maintain 15% of budgeted eligible expenditures
• $6 million – Sendero risk-based capital requirements
38
Central Health - Uses FY17 Administration
39
DESCRIPTION FY 2016 APPROVED BUDGET
FY 2017 PROPOSED BUDGET
Personnel Expenses
Salary & Fringe Benefits 4,058,822 4,513,442
Operating Expenses Legal 966,500 1,166,500 Consulting 1,038,000 1,138,000 Investment Services (Travis County) 98,351 103,351 Benefits & Payroll administrative services 282,800 296,940 Other professional services 435,300 485,300 Marketing & Community Relations 131,400 181,400 Leases, security & maintenance 163,842 183,842 Insurance & Risk Management 125,000 150,000 Phones, computer equipment & utilities 139,794 164,794 Printing, copying, postage & signage 84,570 99,570 Travel, training and professional development 213,737 263,737 Other operating expenses 524,350 524,350
Subtotal Operating Expense 4,203,644 4,757,784 Total Administration 8,262,466 9,271,226
Tax Collection Appraisal District Svcs 880,000 924,000 Tax Collection Expense 546,205 562,591
Subtotal Tax Collection Expense 1,426,205 1,486,591 TOTAL USES 295,777,064 238,415,733
Central Health - Uses FY17 Administration
• Additional Resources: – Compliance – Federal/State Policy – Purchasing – BOM Special Projects Manager
• Increases to Purchased Goods/Svcs – Legal - $200K – Consulting - $100K
40
41
Preview of CCC FY17 Budget Initiatives
Central Health Funding Model – The Big Picture
42
Transformation: Specialty Care
43
Non-Hospital Locations
Dell Med School Integrated Practice Unit E-Consult Pilot Expand
Services Orthopedics ü ü ü ü
Gastroenterology ü ü ü
Cardiology ü ü
Urology ü
Rheumatology
Endocrinology ü ü
Neurology ü ü
Ophthalmology ü
Otolaryngology ü
Complex Gynecology ü
Dermatology ü
Pulmonology ü
Allergy ü
Wound Care ü
Exi
stin
g N
ew in
FY
2017
Transformation: Primary Care
44
Partner with additional
convenient, walk-in care
Review network capacity; move to value-based
payments
Expand urgent care network,
launch education effort
Expand care management
Convenient Care
Primary Care Home Urgent Care Emergency
Department
Least costly Most costly
Transformation: Health Information Technology
Health Information Technology Initiatives • Data Integration • Patient Portal Development & Support • Care Management Software • Medical Access Program (MAP) On-line Application
45
Transformation: Health Care Coverage
Medical Access Program (MAP) Benefit Redesign Affordable Care Act
• Subsidy Program • Enroll ATX
Enhanced Eligibility Services • Online renewals and applications process
46
Medical Access Program/Sliding Fee Scale Patient Utilization Chronic Disease Status w/Proxy Cost Data
47
Category Patients % Patients % Costs Cost per Patient
Zero Chronic Conditions 120,718 67% 34% $1,172 One Chronic Conditions 35,774 20% 25% $2,917 Two-plus Chronic Conditions 24,230 13% 41% $6,977
Total 180,722 100% 100% AVG $2,296
Medical Access Program/Sliding Fee Scale Patients, fiscal years 2014-15
Medical Access
Program
MAP Redesign - Considerations
Sliding Fee
Scale
• Health Risk Assessment • No copay for preventive services • Alternative therapies for pain
management • Group health education • Post-Acute Care* • No co-pay for certain
medications • Palliative care, including hospice • Primary care behavioral health • Substance Abuse treatment • Complex care management
*launched in FY16
Proposed Benefits Pilots
2+ Chronic Conditions
48
Budget Timeline
49
July 20 Central Health Budget and Finance Committee
July 27 Central Health Board of Managers
Aug. 10 Central Health Budget and Finance Committee
Aug. 17 Central Health Board of Managers • Board action needed on budget & notice of proposed increase to tax rate
Aug. 23 Travis County Commissioners Court
Aug. 31 First public hearing • followed by BOM meeting at 6:00 pm
Sept. 7 Second public hearing • followed by BOM meeting
Sept. 14 Central Health Board of Managers • Budget and tax rate adoption
Sept. 20 Travis County Commissioners Court • Action taken on budget and tax rate
(512) 978-8000 www.centralhealth.net @centralhealthtx