Editor's Note: This is the first in a series about efforts to restore the University of Texas Medical Branch to the status and capability it possessed before Hurricane Ike.
Gov. Rick Perry last month signed legislation giving the University of Texas Medical Branch the means to restore capacity at John Sealy Hospital to pre-Hurricane Ike levels.
But in the fine print was a caveat: If Galveston County wanted 550 hospital beds on the island, it would have to pay more toward treating its own uninsured and underinsured residents.
House Bill 51 authorized $150 million in revenue bonds for a new hospital building on the campus. Known as the Jennie Sealy replacement hospital, it would give the medical branch another 220 beds, returning capacity to pre-Ike levels.
But lawmakers, some long resentful of sending tax dollars to the island to pay for indigent health care while their own constituents paid taxes to hospital districts across the state, made the $150 million contingent on a local funding mechanism.
Come November, county leaders will ask voters to approve a new tax to meet that legislative demand. If voters say “no,” the county’s largest employer, which before the Sept. 13 storm operated a regional hospital, would be left with little more than a community facility of about 230 beds for the general public and 100 for prisoners it treats through a state contract, greatly diminishing prospects for the medical branch’s full recovery, officials said.
‘High Stakes’
Because the medical branch must move services and equipment to higher floors after storm surge flooded nearly 1 million square feet of buildings, and because it’s embarking on a modernization program that would double the size of the patient rooms, John Sealy can’t accommodate 550 beds, officials said.
The Jennie Sealy replacement hospital is the linchpin in the recovery plan of an institution upon which Hurricane Ike inflicted $710 million in damages, expenses and lost revenues and caused thousands of job losses, officials said.
“It’s pretty high stakes,” County Judge Jim Yarbrough said.
Target On My Back
But selling higher taxes, even to island voters who most obviously depend on medical branch jobs, health care and money the institution pumps into businesses, won’t be easy, said Yarbrough, a Democrat and the most visible proponent of a hospital district.
“I have a big target on my back,” he said.
Few elected officials, even those whose constituents have endured the jarring economic consequences of downsized medical branch and greatly diminished health care services, are willing to publicly stump for new taxes.
Already conceding the northern part of the county, where Republicans have a stronghold and anti-tax sentiment is steadfast, hospital district proponents don’t plan to ask voters in Clear Lake Shores, Kemah, League City and Friendswood to participate in the district, Yarbrough said.
While the ballot language has not be finalized, broad outlines of the plan call for a district that would include communities from Dickinson south, largely placing hopes on the island and Texas City, where big property owners —– including operators of refineries and chemical plants — are expected to support any effort to restore the medical branch’s ability to handle injuries from industry disasters, Yarbrough said.
‘Liberal Answer To Everything’
Republican Chris Peden, a former Friendswood councilman who ran and lost a race to unseat U.S. Rep. Ron Paul in congress, agrees a hospital district would fail if north county voters had a say.
“I believe Judge Yarbrough is pandering for votes among constituents in the north end of the county,” Peden, who is considering challenging Yarbrough next year, said. “We either need the district or we don’t.”
Peden said he agrees the medical branch, which received $1.4 billion to restore and expand services when insurance proceeds, Federal Emergency Management Agency funds and public and private matches are tallied, is imperative to the county’s economy, but he wants a different solution.
“The liberal answer to everything is to just raise taxes,” he said.
County leaders shouldn’t be dictated to by state lawmakers, Peden said.
County Commissioner Ken Clark, a Republican representing the northern county, did not return phone calls seeking comment.
Keeping Promises
As local leaders lobbied the University of Texas System Board of Regents, which had considered moving most medical branch clinical operations to the mainland, and lawmakers to restore the medical branch on the island, they committed to a local funding mechanism, Galveston Mayor Lyda Ann Thomas said.
State lawmakers in the last legislative session appropriated $566.5 million in general revenue funding for the medical branch, an increase of nearly $109 million over the previous biennium. In the last decade, lawmakers had cut funding for the state institution.
“I and others have made our appeal to the state to fund UTMB, and we committed to seeking local funding to support the hospital care for the uninsured and the underinsured,” Thomas said. “The issue for Galveston and Galveston County is that the state has funded UTMB at this time. Will they continue to fund UTMB at the same level in the future is the question.
“One way I think would help them to continue to fund UTMB is for Galveston County to find supplemental funding to go along with any funding from the state.”
Thomas said she would support a hospital district or alternative local funding mechanism.
What Lawmakers Want
Lawmakers haven’t demanded the county create a hospital district. They’ve demanded the county cover specialty and hospital care for people with incomes at or below 100 percent of federal poverty level, which, for example, is $22,050 a year for a family of four.
The county had covered such care for people earning up to 21 percent of the federal poverty level and recently increase that to 50 percent as a show of good faith to lawmakers.
At 21 percent, the county covered between 2,100 to 3,150 people. At 100 percent, an estimated 10,000 to 15,000 people would be eligible at a cost of about $15 million a year.
Two Ways
The county could raise that money in two ways — increase existing property taxes or create a hospital district funded by a new tax of 6 cents to 8 cents per $100 of assessed value on property in the district.
The difference is mostly political, officials said. Increasing existing property taxes countywide could trigger a rollback election that would jeopardize both the new hospital building and the rest of the county budget, Yarbrough said.
Creating a hospital district would allow a 1.5 cent or so cut in the county tax rate for all property owners — even those not in district — because existing health care expenses would be rolled from the county budget into the new district’s, Yarbrough said.
The district would cost the owner of a $200,000 house between $120 and $160 a year, but with the cut in county taxes, the net increase would be only about $90 to $130.
‘Cover The Working Poor’
To sell the idea, proponents must hack through a thicket of myths and misconceptions about whose health care the tax dollars would cover. Illegal immigrants and people living outside the district would not be covered, Yarbrough said.
Nor would the care be limited to the medical branch. The county would seek contracts with Mainland Medical Center, Clear Lake Regional and others, so eligible residents would have options, Yarbrough said.
Some county residents might be surprised who is covered by the district, Yarbrough said.
“When they hear the word ‘indigent,’ most people are going to immediately think a person is on welfare, lazy or unemployed,” Yarbrough said. “But the hospital district is going to help cover the working poor, residents who work in our fast-food establishments and big-box stores or service employees — waiters and waitresses — who don’t make enough money to buy their own plan or people who have lost their jobs.”
State Rep. Craig Eiland, D-Galveston, who is credited with devising a plan keep the medical branch on the island, thinks voters would approve a hospital district.
“I think it will pass because it has to,” Eiland said.
Residents of other cities across Texas pay taxes in hospital districts, Eiland said.
“We all have to get behind this. Nobody likes to see any increase in taxes, but nobody is asking anything unreasonable or to have of a burden than anyone else.”
State Rep. Larry Taylor, R-Friendswood, could not be reached for comment.
COMING SOON
• Making John Sealy Hospital less prone to flooding and making it more attractive to paying customers will sharply reduce the space available for patient rooms.
• No matter how well the recovery goes, some services traditionally offered at the medical branch will be missing for some time and some may never return.
• Faced with a high percentage of poor and underinsured patients, the medical branch was struggling financially long before Hurricane Ike. State lawmakers took steps to ease that burden, but was it enough and what more could be done to solve the problem?
• What would national health care reform mean for the medical branch?
