Proposed Funding Cuts Hit Home

Feb 1, 2017, 15:50 PM by Ben Raimer

Ben’s Blog 2017 (#2); Jan 31
Special Item Funding

…And we’re off to the races!

The 85th Legislative session kicked into high gear last week and, as we suspected, promises to be anything but boring.

In record time, the Senate released its proposed budget (Senate Bill 1, or SB1) for the next biennium. It offers up $103 billion in state funding, which is less than the amount certified by the Comptroller. Within 24 hours, the House released its first-round budget (House Bill 1, or HB1), which proposes $108 billion for the next biennium.

The $5 billion difference between the two proposals is obviously a stretch, so there will have to be a lot of “give and take” in the compromise sessions that bring the two budgets closer to agreement. It seems possible that the House may look at dipping into the “Rainy Day Fund” to cover some of the proposed spending in HB1, but the Senate will be more reluctant to consider tapping that source. 

For UTMB and all other state Health Related Institutions (HRIs), the reductions hit home, with the Senate eliminating all Special Item Funding in the HRI budgets, except for programs related to providing mental health services. In addition, SB1 also reduced the allocation of Formula Funding per student; the state’s supplement to universities through Formula Funding helps institutions maintain affordable tuition rates. For instance, UTMB’s School of Medicine currently offers the fourth lowest tuition to students in the US.

In terms of Special Item Funding, the proposed SB1 eliminates all funding in UTMB’s budget for the hospital’s Chronic Home Dialysis Program, the planned regional Bio-Containment Critical Care Unit, the Primary Care Physician Services program, the Area Health Education Centers-East (AHEC) and Institutional Enhancements. In addition, SB1 proposes elimination of funding for state-supported indigent care programs on two fronts (Special Item Funding to UTMB and the Health and Human Services Commission budget that supports unsponsored care). In total, over the next biennium, the Special Item reductions eliminate $29.4 million in funding essential for vital services at UTMB.

Indigent health care support is reduced by $14.2 million. In 2016, UTMB recorded 33,600 encounters among indigent patients from 124 Texas counties; the cost for that care was $49.6 million, of which $47.7 million was not reimbursed. If this funding and other revenue sources are eliminated, the impact on UTMB’s primary missions will be significant. 

It should be noted that, during hearings last week, Senate Finance Committee members were quick to point out that the current SB1 is just a starting point for ongoing budget discussions. But the prospect of such cuts in funding certainly concerned every president, dean, chief financial officer and management officer in the hearing room. Such reductions are not compatible with growth or, in many cases, successful training of students and residents, maintenance of research standards, or delivery of clinical services.

The elimination of support for UTMB’s Primary Care Physician Services program would jeopardize UTMB’s training of the primary care physician workforce, an effort for which we have an excellent reputation nationally. UTMB ranks number 1 in the state in both the number of graduates who practice in Texas and the number of graduates who choose a career in primary care. Such rankings do not occur by accident. They are the result of careful programming and faculty mentoring of students and residents.

The proposal to eliminate the state’s first AHECs would also reverse Texas’ longstanding work in rural and underserved communities, where AHEC provides health profession workforce education, community health services and prevention services, and assists communities with health profession recruitment and economic development. 

Dr. David L. Callender, UTMB president, provided testimony before the Senate Finance Committee on Jan. 26, making a strong case for preserving funding for essential programs aligned with the institution’s core missions. Noting the importance of Formula Funding in keeping tuition reasonable and lowering student debt as enrollment grows, he asked Senate members to consider restoring that funding source to prior levels.

He also noted the university’s two-year investment toward the construction of the Bio-Containment Critical Care Unit and asked for continued support for that regional center of excellence and public health resource to treat individuals with emerging, life-threatening infectious diseases. He also stated the importance of UTMB’s role in providing health care for underserved populations, noting our long history of service to individuals all over the state.  

Dr. Callender described AHEC’s important role as a workforce pipeline for the health professions in rural and underserved areas, as well as a catalyst for community development, health care education, prevention services and economic development. 

He also advocated for UTMB’s request to transition our hospital funding to a patient-based formula, consistent with how other HRI hospitals in Texas are funded. Finally, Dr. Callender asked the committee to preserve UTMB programs that provide a high rate of return on investment to the citizens of Texas.

The budget process is a reflective and thoughtful one that requires each institution to take a careful look at all of its programs. The Senate Finance Committee has asked each HRI to assess the value of each Special Item program and submit a priority list for funding consideration. The Senate has set aside $300 million for Special Items in the next biennium. But the sum of all such requests from all state universities this session exceeds $1 billion. The Senate may add additional funding to its Special Items restoration pool, but likely not enough to bridge the gap. Competition for program funding will be keen.

UTMB leadership has had to make some difficult decisions in identifying those programs most critical to the future success of the health and educational systems. In priority order, UTMB has requested restoration of all or parts of funding for:

  • The Bio-Containment Critical Care Unit,
  • Indigent Health Care Funding,
  • Primary Care Physician Services programs, and
  • AHEC-East.

From my viewpoint, these programs are central to UTMB’s commitment to patient care, innovation, education, research, community needs and population health. No one wants to have to prioritize among UTMB programs, because they all are important to our mission. In the current economic times in Texas, however, these decisions are required if the schools are to continue to achieve their core missions.

Over the next four months, UTMB’s local legislative delegation, the Texas Legislature, UTMB administration, UT System, and our students and alumni will be focused on making their voices heard about the importance of these programs to our future success and to the health and safety of all Texans.

Stay tuned…