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JPS board predicts $77 million surplus this year

FORT WORTH — The Tarrant County Hospital Board suggested that it could cut next year's property tax rate and still add programs and expand services, during preliminary budget discussions Thursday.

Projecting a $77 million surplus by the end of the fiscal year on Sept. 30, administrators predict that the hospital district will continue to turn a surplus even with a 1/4-cent to 1-cent reduction in its tax rate.

The hospital district, which does business as the JPS Health Network, must approve its budget and tax rate by next month for final approval by Tarrant County commissioners.

"I'm assuming no one on the board has the desire to raise the tax rate," JPS board Chairman Steve Montgomery said.

The board then unanimously approved a maximum tax rate for next year of 23.0397 cents per $100 of assessed value, which is the current tax rate. The tax bill for the owner of a $100,000 home would be about $230. Next month, the board could leave the tax rate unchanged or reduce it.

If the rate remains unchanged, JPS would gain about $17.25 million in property tax revenue, according to finance officials' preliminary estimate.

The hospital district has recently come under scrutiny regarding a scathing series of consultants' reports, which were kept from the board, that revealed barriers to access and numerous problems with patient care.

Some community healthcare advocates have also criticized JPS' mounting surpluses and former chief executive David Cecero's emphasis on seeking insured patients.

Some JPS physicians, interviewed in a series of articles by the Star-Telegram, said they were worried that the hospital district is more concerned about profit than about caring for needy patients. Cecero announced his retirement in May and was abruptly replaced in June by the board. After Cecero's ouster, two board members resigned and the chief financial officer stepped down.

The problems also prompted state health officials and a national hospital accrediting agency to conduct surprise inspections of JPS, which uncovered dozens of problems.

Improving access

Board members have said that next year's budget should focus on improving access and quality of patient care.

Including employee raises and the effect of inflation on expenses, the hospital district's budget is expected to rise to about $603 million for fiscal 2009.

JPS administrators would like about $6.6 million in new spending to include:

■ 29 case managers

■ Physicians and staffers such as interpreters at community health clinics

■ A new pilot program for psychiatric services at JPS school-based clinics

■ Expanded cardiology services

Board members did not prioritize those wish-list items or discuss reducing patient co-payments. Last month, JPS physicians and board member Martha Walker suggested that JPS study whether reducing co-pays would improve patient access to care.

Before the board's discussion on the budget, representatives of the League of Women Voters of Tarrant County recommended that JPS add 10 school-based clinics to better serve the indigent and underinsured population, help reduce the county's infant mortality rate and serve children of illegal immigrants.

"These are one of the most cost-effective ways to deliver care, through the school-based clinics," said Marjorie Montgomery, president of the group. "Our studies tell us the clinics you have are not sufficient to serve the persons in Tarrant County who were medically indigent."

Investment portfolio

Last year, JPS brought in about $97 million more than it spent and expanded its investment portfolio to nearly $400 million while opening a five-story, 108-bed patient pavilion, which took emergency and surgical services out of the aging John Peter Smith Hospital.

Opening the new facility required 87 new employees at a cost of about $3.6 million in salaries and benefits and $3.5 million in additional costs such as utilities and housekeeping.

"We included that point in the budget presentation because it shows a new incremental expense that we must absorb and have already accepted into the budget," said Randy Rogers, a former JPS budget director who was named interim chief financial officer this week.

Although JPS estimates a slight drop in the use of its emergency room this year, officials predict that will increase again next year by about 5 percent.

JPS Chief Operating Officer Ron Stutes said that some of the decrease this year in the emergency room is due to better screening of patients and redirecting more patients to the hospital district's urgent care center.

"There are studies that show a new emergency department will attract about a 10 percent increase in new patients, and we're lowering that expectation to about 5 percent," Stutes said. "With that and the county's growing population, we expect the ED number to pick back up."

Unfunded programs

JPS board member Tonya Veasey asked whether it is possible to fund some programs recommended by JPS staff that do not make it into next year's budget.

"It seems like we say we don't have enough money when we are here at the budget process, then we find out there is all this extra money," she said.

Stutes said previous hospital boards have decided not to fund ongoing expenses with funds that are not reoccurring.

A policy set by a previous JPS board requires the hospital district to keep 100 days' cash on hand -- currently about a $90 million reserve.

Montgomery suggested that the board meet again for a weekend session to delve into the budget in more detail before making a final decision.

Interim Chief Executive Robert Earley said he hopes that the board can fund some new initiatives and consider a tax rate cut.

"The challenge is to consider the needs of the patient and the taxpayer," he said. "I think we've had far greater open discussion about what our priorities are, and we let the board know what all those budget requests were that were brought to us from all over the JPS Health Network."