GALVESTON — Whether they realize it or not, Galveston County residents face a hard and momentous question: Would they pay a tax to restore University of Texas Medical Branch health services to pre-Hurricane Ike conditions?
If the answer is “no,” the county’s largest employer, which included a 550-bed hospital, numerous clinics and medical sub-specialities, likely would be reduced to a small community hospital.
But elected officials with clout enough to harness support for a public hospital district are unwilling to pose that question to constituents recovering from the storm, which struck Sept. 13, causing severe, widespread flooding and leaving the medical branch with $710 million in Ike-related expenses. Yet other community leaders say now is the time to form such a district.
‘Not The Time’
Galveston Mayor Lyda Ann Thomas, County Judge Jim Yarbrough and state Rep. Craig Eiland all say formation of a hospital district to help pay for health care, especially for the poor, deserves serious consideration. But they all say they need more time and clear direction from medical branch leaders before selling the plan.
“This is not the time to ask the citizens to consider a health district due to ongoing recovery efforts, which I believe we have to take care of right now,” Thomas said.
Clock Is Ticking
But time is something the state-funded medical branch doesn’t have. The institution, home to the state’s oldest medical school, faces the worst fiscal crisis in its 117-year history.
Thousands of employees are in limbo awaiting word about whether state and federal officials will help keep the institution afloat after 750,000 square feet of its buildings were flooded, knocking major revenue generators, including John Sealy Hospital, out of commission.
Even before the storm, lawmakers from elsewhere in Texas were resentful that their constituents paid taxes to fund their own hospital districts, on top of paying for indigent care in Galveston and surrounding counties.
Now the clinics and hospital, where students treated the wide range of cases needed for a thorough medical education, are vulnerable to the makeover those lawmakers have long wanted to do.
‘Abandon Those Buildings’
The medical branch said it costs Texas taxpayers $120 million a year to treat indigent patients from across the state. But about 70 percent of that amount is for underinsured and uninsured people in six counties, including Galveston, Brazoria, Chambers, Jefferson and Liberty.
Some lawmakers have warned local leaders and residents to pay up if they wanted continued state support.
“If Galveston — the citizens of Galveston don’t start participating in trying to help keep UTMB in Galveston — on the island, I can assure you that the state of Texas is going to abandon some of those buildings and move it to a more productive part of the state,” state Rep. Lois Kolkhorst, R-Brenham, said Aug. 28 at a House Appropriations subcommittee hearing.
‘Handwriting On The Wall’
Dr. Ben Raimer, who leads the medical branch’s health care policy and legislative affairs team, said Kolkhorst’s remarks were emblematic of sentiment in Austin.
“I filed that under handwriting on the wall,” Raimer said.
When lawmakers convene for the 81st legislative session in January, they want to hear the county is working to create a hospital district, Raimer said.
“We need to demonstrate to them that we have a plan,” Raimer said.
Although it’s difficult to ask people to pay more taxes on properties devalued by the storm, that shouldn’t prevent local leaders from offering a strategy, Raimer said.
‘Price Of Poker’
Harris L. “Shrub” Kempner, a member of the medical branch’s development committee, said the county must ante up a hospital district to get legislative support. Local leaders should ask county voters to approve a hospital district during a May election, the next opportunity they’ll have, Kempner said.
“This is the price of poker,” Kempner said. “People don’t like any taxes, but we ought to try right away. If it doesn’t pass this time, we may have to bring it back again.”
But first, local leaders would have to decide how to shape a hospital district.
Should it be funded through property taxes or sales taxes?
Should it include surrounding counties that send their indigent to the medical branch?
How much money would a district need to generate each year?
In Galveston County alone, the medical branch provides $43 million a year in indigent care, officials say.
If the hospital district imposed a 20-cent tax rate, the owner of a $100,000 house would have to pay about $200 a year, generating $40 million for the district.
Sales Tax Sunk
Also, voters would have to understand that a district wouldn’t just benefit the island’s hospital. A hospital district’s purpose is to create a pool of funds to purchase health care for eligible people, Raimer said. For example, patients could choose to go to Mainland Medical Center in Texas City for treatment, officials say.
Funding a hospital district through a sales tax ought to be considered, Yarbrough said. But in 2001, a measure to impose a 1-cent sales tax to create a health-care pilot program in the county failed in the Senate. The state sales tax rate is capped and giving Galveston County control over some of the remaining rate might hamper the state’s ability to raise its tax rate, opposition lawmakers feared.
‘Shell Of What They Were’
Saving the medical branch, which employs about 12,000 people, is crucial, Yarbrough said. But a lot of questions need answers, and medical branch officials have yet to say whether a taxing district would result in a hospital the community needs, he said.
“Having UTMB go down to a shell of what they were will in the long-term be much more devastating than Hurricane Ike,” Yarbrough said.
But panicking and presenting decisions to taxpayers too soon could hurt chances to ever form a hospital district, Yarbrough said. The May election is probably too soon, he said.
“That’s a pretty short trigger,” he said. “If we need to do it that quick, we could speed up the paces; we want to make sure it has the best chance of success.”
Jobs On The Line
Even before the storm, the medical branch was struggling with inadequate state funding and faced a $35 million deficit, despite efforts to slash costs.
Now the storm-slammed institution, with only $100 million in flood insurance and only about $160 million in unrestricted reserves, is running out of cash. Last month, intervention of some powerful lawmakers bought a reprieve to about 4,000 employees the University of Texas System had considered laying off. But it was only a reprieve. Lawmakers have yet to commit any money.
Thomas last week met with Lt. Gov. David Dewhurst, House Appropriations Committee Chairman Warren Chisum and Senate Finance Committee Chairman Steve Ogden as they visited the island campus.
She urged them to fund the medical branch at appropriate levels in the next two sessions, allowing county leaders time to formulate a funding plan for indigent care.
Eiland said he agreed that it was difficult to ask residents in areas hit hard by the storm — Bacliff, Bolivar Peninsula, Galveston and San Leon — to look at a taxing district now.
Sooner or later, however, county resident would have to decide whether they want to pay to help restore services at the medical branch, Eiland said.
“Every session people start the conversation about funding UTMB questioning why Galveston County doesn’t have a hospital district,” he said. “We have to change that conversation.”
