Fiscal Year 2017 Proposed Budget and Tax RateCentral Health Board of ManagersAug. 17, 2016Patricia Young Brown, President and CEO;Jeff Knodel, CFO;Sarah Cook, Director, Integrated Delivery System Strategy and Planning

Funding Model

2

$ $$$

$$$

4.5% Over Effective Property Tax Rate Year-Over-Year (in millions)

3

$0$20$40$60$80

$100$120$140$160$180$200$220$240

FY17 FY18 FY19 FY20 FY21

Total Sources Total Uses Total Reserves Emergency Reserve

FY17 Proposed FY17 FY18 FY19 FY20 FY21

Total Sources 203.5 200.9 196.0 207.5 219.0 230.9Total Uses 208.2 207.3 212.4 212.0 217.4 225.7Total Reserves 61.9 59.6 44.2 40.2 42.6 48.6

FY17 Proposed Tax Rate (4.5% over Effective Rate)

4

FY16 FY17 (Proposed)

Average TaxableHomestead Value

$262,874 $285,152

Tax Rate 11.7781¢ 11.0541¢

Tax Bill $309.62 $315.21

Annual Increase = $5.59 (1.8%)

Central Health Property Tax Impact Statement: Fiscal Years 2015-17

5

Actual Appreciation

RateHome Value

TaxableHomestead

Value

4.5% Over Effective Tax

RateTax Bill Annual

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

8.7% 326,100 260,880 0.117781 $307 $4

8.0% 432,000 345,600 0.117781 $407 $3

7.5% 537,500 430,000 0.117781 $506 $1

9% 238,056 190,445 0.110541 * $211 $5

8.5% 353,819 283,055 0.110541 * $313 $6

7.6% 464,832 371,866 0.110541 * $411 $4

7.3% 576,738 461,390 0.110541 * $510 $4

FY15

Bas

elin

eFY

16FY

17

*Proposed at 4.5% over the effective rate

Major Texas Hospital Districts: FY16 Tax Burden Comparisons

6

Major Texas Hospital Districts: Debt and Pension Comparisons

7

Central Health FY17 Proposed Budget

8

Description FY16 Approved Budget FY17 Proposed Budget

Tax Rate 0.117781 0.110541

SourcesProperty taxes 160,705,076 169,806,722

Seton lease revenue 34,371,988 31,544,675

Interest 400,000 400,000Tobacco litigation settlement 1,600,000 1,800,000

Subtotal revenue 197,077,064 203,551,397

Contingency Reserve 98,700,000 36,600,000Total Sources 295,777,064 240,151,397

UsesHealth care delivery 286,088,392 229,738,205Administration 8,262,466 8,926,601Tax collection 1,426,205 1,486,591Total Uses 295,777,064 240,151,397

Reserves (ending balance)Capital - -

HMO Risk-based Capital Reserve - -

Contingency Reserve - -

Emergency Reserve 28,515,000 29,895,000 Total Reserves 28,515,000 29,895,000

Central Health FY17 Proposed Budget OverviewIn FY15 and FY16, Texas Health and Human Services Commission’s intergovernmental transfer (IGT) schedule created significant timing issues for Central Health. As a result, Central Health had to carry forward funding for planned transfers into the next fiscal year. Because of these timing differences, the health care delivery budget in FY15 and FY16 was larger than it would have otherwise been.

In FY17, the timing issues do not exist, thus normalizing the health care delivery budget. Below is a comparison of the past two years and FY17 less the Contingency Reserve, which provides a better comparison of historical health care delivery budget amounts.

9

FY15 FY16 FY17 Proposed

Total Health Care Delivery 259.1M 286.1M 229.7M

Less Contingency Reserve 76.5M 97.1M 32M

Net Health Care Delivery 182.6M 189M 197.7M

FY17 Key Initiatives

Stewardship• Delivery System Reform Incentive Payment (DSRIP) operations and program

renewal—Central Health, CCC• Expansion of Affordable Care Act (ACA) subsidy—Central Health

Partnership• Redevelopment of the Central Health Brackenridge Campus—Central Health• Central Health promotion, education and community engagement—Central Health

Transformation• Improvement of specialty care—CCC• Improvement and expansion of Medical Access Program (MAP)—CCC• Enhancement of primary care continuum—CCC• Transition to value-based payments—CCC

10

11

1115 Waiver DSRIP Projects Funded by Central Health Intergovernmental Transfers

FY17 Key Initiatives: Health Coverage Expansion Proposal

12

Fede

ral P

over

ty L

evel

(FPL

)

FY17 Key Initiatives:Central Health Brackenridge Campus

13

Timeline

• Request for Qualifications (RFQ) issued by September 2016

• Leases revised by December 2016

• Request for Proposals (RFP) issued by January 2017

• Hospital moves May 2017

Funding Model: The Community Care Collaborative

14

Community Care Collaborative FY17 Proposed Budget

15

Description FY16 Approved Budget FY17 Proposed BudgetSOURCESDSRIP revenue 55,665,911 62,432,400 Member payment - Seton 46,100,000 41,500,000

Member payment - Central Health 26,245,166 26,245,166

Contingency Reserve 23,614,250 22,301,379 Other 15,000 40,400 Total Sources 151,640,327 152,519,345

USESHealth care delivery 92,782,800 94,031,111 DSRIP project cost 23,857,527 23,488,234 UT Affiliation Agreement 35,000,000 35,000,000 Total Uses 151,640,327 152,519,345

Sources over uses - -Contingency Reserve - -Emergency Reserve 5,000,000 5,000,000 Total Reserves 5,000,000 5,000,000

FY17 Key Initiatives: Specialty Care

16

Non-Hospital Locations

Dell Med School Integrated Practice Unit E-Consult Pilot Expand

ServicesOrthopedics

Gastroenterology

Cardiology

Urology

Rheumatology

Endocrinology

Neurology

Ophthalmology

Otolaryngology

Complex Gynecology

Dermatology

Pulmonology

Allergy

Exi

stin

gN

ew in

FY1

7

Medical Access

Program

FY17 Key Initiatives: MAP Redesign

Sliding Fee

Scale

• Health Risk Assessment• No copay for preventive services

• Alternative therapies for pain management

• Group health education• Post-acute care expansion• Palliative care, including hospice• Primary care behavioral health• Substance abuse treatment• Complex care management

Proposed Benefits Pilots

2+ Chronic Conditions

17

FY17 Key Initiatives: MAP Redesign

18

High Risk

Medium Risk

Low Risk

Plan of

Care

Convenient Care

Primary Care

UrgentCare

Emergency Care

Less Expensive More Expensive

• Review network capacity

• Start transition to value based payments

• Utilize care management

FY17 Key Initiatives: Primary Care

• Partner with additional convenient, walk-in care

• Expand urgent care network

• Launch education effort

19

FY17 Key Initiatives: Value-Based Payment

Incremental steps under consideration include:

• Continuation of DSRIP value-based payment (VBP) contract structure• Establishment of baseline quality measures• Implementation of performance dashboards• Shift payment model to promote expansion and variation of reimbursable

services (registered nurses, PharmDs)• Addition of payment for care management and encounters with non-

providers• Creation of quality incentive pools for improved outcomes and achievement

of quality measures

20

FY17 Key Initiatives: DSRIP Demonstration Year 6

• Demonstration Year (DY) 6 is continuation of DY5– DY6 will continue through 12/31/17– Next 1115 Waiver is anticipated to begin 1/1/18

• Projects must continue in DY6 to maintain funding allocation in DY7 and thereafter

• Project payment in four areas:– Core program components– Patient encounters– Program evaluation– Sustainability assessment

• Outcome measures will continue as pay-for-performance and require improvements over DY5 achievement

21

Budget Timeline• Aug. 23 Travis County Commissioners Court

(FY17 Central Health proposed budget and property tax rate)

• Aug. 31 First public hearing—6 p.m.

• Aug. 31 Central Health Board of Managers(FY17 Central Health budget) —immediately following public hearing

• Sept. 7 Second public hearing—5:30 p.m.

• Sept. 7 Central Health Board of Managers(FY17 Central Health budget) —immediately following public hearing

• Sept. 14 Central Health Board of Managers (FY17 Central Health budget)—5:30 p.m.

• Sept. 20 Travis County Commissioners Court (FY17 Central Health proposed budget and property tax rate)

22

(512) 978-8000www.centralhealth.net@centralhealthtx