What is the Dallas County Hospital District?

The Dallas County Hospital District is a political sub-division of the State of Texas created pursuant to Article 9, Section 4 of the Texas Constitution and Article 4494n of the Texas Civil Statutes, which operates the Parkland Health and Hospital System.  The Dallas County Hospital District was approved by the voters of Dallas County on December 23, 1954.  The Hospital District is governed by a seven-member Board of Managers that is appointed by the Dallas County Commissioners.  The Dallas County Commissioners Court has general supervisory powers over the affairs of the Dallas County Hospital District by virtue of the governing law, Chapter 281 of the Health & Safety Code.

What is the Parkland Health and Hospital System?

The Parkland Health and Hospital System was created as a county hospital district and is operating according to state law.  Parkland’s mandate is “to furnish medical aid and hospital care to indigent and needy persons residing in the hospital district.”  Parkland is a safety-net hospital and therefore mandated to treat those residing in the hospital district who are in need, whether indigent, uninsured, undocumented or legal citizens. Parkland is an integrated health system that consists of the following:

Parkland Memorial Hospital – an academic medical center that serves as the primary teaching hospital for the University of Texas Southwestern Medical School (UTSW) and provides:

• An inpatient service with 675 staffed adult beds.
• Level 1 Trauma Center that manages over 50 percent of all trauma cases in Dallas County
• Regional resources for disaster preparedness and response
• The only burn center in North Texas
• Emergency services providing over 140,000 annual visits, specialty outpatient services providing over 260,000 visits each year, and the Community-Oriented Primary Care Health Centers and the Dallas County Jail providing over 725,000 visits each year.

Primary Care Network – a network of 11 Community-Oriented Primary Care health centers, 11 Youth & Family Centers in partnership with the Dallas and Carrollton-Farmers Branch Independent School Districts, and the Homeless Outreach Medical Service that serves 30 Dallas County shelters. This network of centers extends primary care, prevention and wellness services throughout Dallas County. It has demonstrated reductions in costly and avoidable emergency room visits and preventable inpatient admissions.

Health Plans – In 1999, Parkland formed Parkland Community Health Plan, Inc. (Health Plan), a Medicaid HMO and later added a plan for those enrolled in Children’s Health Insurance Program (CHIP).  The Health Plan is regulated by the Texas Department of Insurance.  There are approximately 150,000 beneficiaries enrolled in the two plans.  In addition to the Health Plan, Parkland has established Parkland Health Plus for eligible indigent residents of Dallas County that annually serves approximately 77,000 patients.

Why is the Dallas County Commissioners Court required to court order a bond election?

According to Subsection 281.107(b) of the Health and Safety Code only the Dallas County Commissioners Court is authorized to call, order, and hold an election in the Hospital District’s name, and within the boundaries of the District

Why is there a need for a new hospital?

• current facility functionality and space constraints
• current facility issue with code compliance

• population growth

• regional resources for disaster preparedness and response

Parkland is designed to deal with mass injuries and mass casualties. It houses a nationally-recognized Burn Unit, it’s a Level 1 Trauma hospital, and it is home to the first hospital-based decontamination unit in the Southwest.  Parkland is an integral partner with the City of Dallas Police and Fire Departments, the FBI, CIA, CDC, FEMA, the Dallas/Fort Worth Hospital Council, the National Public Heath Service, the National Disaster Medical Systems, and the Government Medical Security Service, among other agencies and coalitions in a collaboration for disaster preparedness.  In addition, Parkland has completed their readiness guidelines, which are now in demand from hospitals and health systems across the country, that addresses concerns including chemical and biological response protocols, decontamination plans, smallpox contact investigation forms, an emergency preparedness checklist, and guidelines for disseminating information to media in mass casualty situations.

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How has the Hospital District and Dallas County prepared for a new hospital?

• PHHS staff and the Dallas County Hospital District (DCHD) Board of Managers have engaged consultants to gather historical data, review demographic assumptions, conduct a feasibility study, and develop a strategic plan.
• Dallas County Commissioners Court appointed a Blue Ribbon Master Capital Plan Advisory Committee to
  1. review, evaluate and advise on a Master Capital Plan process and plan for DCHD.
  2. insure that the demographic assumptions and projections used in the plan are reasonable and acceptable to the Commissioners Court.
  3. insure that the plan addresses the goals, objectives and priorities of the DCHD and that such goals & objectives are mutually acceptable by the DCHD Board of Manager and Commissioners Court.
  4. assist the Commissioners Court in insuring that the plan includes a full operational impact analysis that identifies the full operational cost of each component of the plan and how such cost can be funded.
• PHHS is debt free and the DCHD Board of Managers continues to strive to maintain a consistent and positive total margin and to maintain sustained moderate level of cash/liquidity, which is necessary for financing the hospital’s replacement
• Dallas County Commissioners Court has left the DCHD tax rate the same since 2002, which has provided Parkland with the opportunity to accumulate capital that is needed for obtaining a good bond rating and the ability to contribute $250 million in cash for the new hospital

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What was recommended by the Blue Ribbon Panel and the Hospital District Board of Managers?

• On 6/11/07, the Blue Ribbon Panel approved the long-range Master Facility Plan, which is 100% replacement of the hospital
• On 6/27/07, the DCHD Board of Managers approved the recommendation of the Blue Ribbon Panel

• On 6/24/08, the DCHD Board of Managers approved the following Option A2 and directed staff to prepare a resolution for Board of Manager approval requesting the Dallas County Commissioners Court to call and hold an election on 11/4/08, on the proposition and under the procedures authorized by section 281.107, Health & Safety Code, for the purpose of authorizing the pledge of all or a portion of the District’s hospital system revenues and the revenues received from the ad valorem tax that was previously approved by the voters of the District to the payment of bonds and other obligations that will be issued and executed for the purpose of partially funding the capital improvements to PHHS in accordance with PHHS Management’s recommended Option A2. The order shall specify the maximum amount of general obligation bonds that will be issued, upon voter’s approval, in an amount not to exceed $747m, which can be serviced by an ad valorem tax rate for PHHS not to exceed 2.5¢ per $100 of assessed valuations.
• On 7/22/08, the DCHD Board of Managers approved the resolution requesting Dallas County Commissioner Court to call and hold an election, and said resolution was forwarded to Dallas County Commissioners to be included in their briefing and court order process.

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What are the facts concerning Indigent, Undocumented, and Out of County care?

Parkland is a payer of last resort and therefore mandated by Federal law to treat those who are in need, whether indigent, uninsured, undocumented or legal citizens. So that the burden of the cost of care does not solely fall on the shoulders of Dallas County tax payers, Parkland’s financial counselors help patients who are uninsured find resources available to them through federal and state assistance programs. As well, Parkland does provide a program called Parkland HEALTHPlus that is designed for Dallas County indigent patients with family incomes up to 200% of the federal poverty level and no third-party coverage, such as Medicaid, Medicare, or commercial insurance.

Indigent /Uncompensated Care - Texas Counties have long had a mandate to provide medical care for indigent residents; however, because of the “Healthcare Crisis” in our country right now, across the United States there are a growing number of people who are “uninsured” or “underinsured” and therefore struggle to access healthcare, but are not necessarily “indigent.” Employers, the traditional supplier of most people’s health insurance policies, have dramatically decreased their health benefits, offering greatly reduced health insurance packages or none at all, or utilizing part-time workers in order to avoid the issue entirely, and purchasing health insurance in the private market can be prohibitively expensive even for middle-income families. Furthermore, due to ongoing funding cuts at the Federal and State levels, the overall amount of funding available to counties for indigent healthcare expenses has decreased dramatically, meaning local tax dollars are being expected to bear more and more of the burden of indigent care, which is a level of expense that the local property tax system was never designed to accommodate and which is unsupportable by local taxpayers alone without assistance from the Federal and State level.

• As of 2007, according to the Commonwealth Fund study, there are an estimated 25 million underinsured adults in the U.S., which is a 60% increase from 2003, and much of the growth comes from the middle class families that earn approximately $40,000 annually
• According to The Families USA report, healthcare premiums for Texas’s working families rose by 79.7% while the median earning rose by only 10.3% from 2000-2006
• Persons in Dallas County without insurance were estimated at 530,000 in 2000; 633,522 in 2005; and are projected to be 829,000 by 2011
• The Task Force on Access to Health Care issued Code Red: The Critical Condition of Health in Texas, in April 2006 which was updated in 2008 with further recommendations identified the following:
  • 25.1% (5.6 million) of Texans are without health insurance, the highest in the nation
  • 79% of uninsured Texans work or have a working family member
  • Texas is a state of small employers o
    • over 70% of all Texas businesses are small employers, with fewer than 50 employees
    • only 37% of small employers offer health insurance benefits to their employees
    • only 35% of these employees actually enroll in insurance plans, primarily because of the lack of affordable coverage
  • 76-82% of the uninsured in Texas are U.S. citizens
  • 68% of non-poor uninsured Texans are White, non Hispanic
  • The 2006 total market share for Dallas County residents within the top four hospitals were

    Parkland	16.9%	Presbyterian	8.0%
    Baylor	9.5%	Methodist	6.3%

    (Market Share:Percentage of discharges from the individual hospital (excluding normal newborns) divided by total discharges reported for all Dallas County residents.)
  • The 2006 uninsured market share for Dallas County residents within the top four hospitals were:

    Parkland	39.0%	Presbyterian	1.9%
    Baylor	5.8%	Methodist	6.3%

    (Uninsured: Those Dallas County residents whose patient charges were categorized as either Medicaid, Medicaid pending, charity, or self pay. For inpatients, self pay patients are almost exclusively uninsured.)

  Undocumented – Reimbursement for undocumented patients come from three sources. Under federal law, Medicaid pays for the delivery of children to mothers who cannot prove citizenship and the Title V federal program pays for prenatal care. Also, because the federal government recognized that Emergency Medical Treatment and Active Labor Act (EMTALA) was putting a heavy financial burden on hospitals located in regions with large populations of undocumented aliens, it enacted Section 1011 of the Medicare Modernization Act of 2005 which specifically provides for federal reimbursement of emergency health care for undocumented and certain other specified aliens. Below are Parkland’s charges and federal reimbursements for the care of undocumented patients.

  Undocumented Care	Charges	Payments
  FY06 Actual	$  156,000,000	$  31,000,000
  FY07 Projection	$  222,800,000	$  43,000,000

  Section 1011
  FY06 Actual:	Encounters	Charges	Payments
  >All Patients	1,115,714	$  1,615,637,128	$  287,189,147
  Section 1011 Patients	4,751 (.43%)	$   23,831,713 (1.48%)	$   1,570,046 (.55%)
  FY07 Projection
  All Patients	N/A	N/A	N/A
  Section 1011 Patients	N/A	$   35,000,000	$   5,000,000

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  Out of County - The 1985 Indigent Healthcare and Treatment Act (IHCTA), established counties and all public hospitals as the payer of last resort and statutorily set out specific duties and responsibilities. Counties have three options for providing indigent care – (1) create a hospital district/taxing district; (2) operate a public hospital; or (3) operate a County Indigent Health Care Program (CIHCP). In addition the IHCTA established that counties are liable for $30,000 per county resident or 30 days of hospitalization or nursing-home care, whichever comes first. up to 8% of the county’s general tax levy. Once a county spends 8% of its general tax levy, the county may apply for the State to chip in a 90% match for additional expenditures; however, if the State fails to pay the match the county is absolved from expenditures above 8% of its levy.

  Furthermore, counties may set their own indigency standard with the minimum being 21% of the Federal Poverty Level (FPL), which is set by the State. For counties adopting the 21% of FPL, a single person earning less than $182 gross monthly or a family of four earning $371 gross monthly are considered indigent. As for Parkland, they consider those at or below 250% of the FPL indigent to some extent based on a sliding scale, which would be a single person earning less than $2,167 gross monthly or a family of four earning $4,417 gross monthly.

  Dallas, Hunt, and Tarrant counties do have a public hospital; however, the remaining surrounding counties do not so their indigent residents at various times seek care at Parkland when there are no other options for them. While 89.2% of patients are Dallas County residents, 7.3% are patients from surrounding counties (1.2% of patients are within the North Central Texas Trauma regional area; and the remaining 2.3% are from other areas). Over 1/3 of insured discharges are patients from outside Dallas County (approx. 70-75% of patients from out-of-county are insured vs. only 30% from Dallas County); only 10% of Medicaid or unfunded patient discharges are from outside Dallas County; furthermore, outpatient activity from outside Dallas County is low.

  Patient economics for out-of-county patients have been analyzed by payer, emergent status, and patient type, with the following observations noted:

  • The out of county patients generate positive economic results for Parkland, as they produce a positive overall contribution margin, contributing to the indirect costs of care.
  • Out of county patients are more heavily insured, are usually emergent patients, and generally require inpatient services, all of which are favorable for patient economics.
  • Out of county outpatient non-emergent costs were higher than revenues for unfunded patients.

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  FY2007 Contribution Margins - Out of County Patients
  

  Patient economics for out of county patients showed contribution margin deficits in two areas:

  • * unfunded emergent inpatients: Since Parkland is required to treat all emergent patients pursuant to EMTALA Federal laws that prohibit emergency rooms from not treating anyone that presents themselves at the emergency room for treatment, no changes are suggested in this category of out of county patients. The unfunded patient’s contribution margin deficits of $2 million are more than offset by positive contribution margins totaling $21 million from insured, Medicare and Medicaid emergent inpatients.
  • ** unfunded non-emergency outpatients: Further analysis is required to determine the specific services these patients received, and recommendations for actions tailored to these circumstances.

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