Texas DSRIP Funding: Does it Work?

Texans often have poor healthcare, as evidenced by the state’s low rankings in various measures of individual’s health. For example, Texas leads the nation in the number of uninsured individuals and the number of teen pregnancies, and is ranked 34th out of the 50 states for overall health. To combat poor health outcomes, many other states have chosen to expand Medicaid coverage so that more individuals have the ability to seek out health care. Texas declined to expand Medicaid for various reasons, and instead applied for a Section 1115 waiver, which pays hospitals and providers for care. I believe that increasing DSRIP funding would also increase Texans’ ability to receive better healthcare at a lower price.

In 2011, the Obama Administration approved a section 1115 waiver for Texas, which enabled the expansion of Medicaid managed care to the entire state and created two new funding sources that would pay hospitals and providers. These two funding sources totaled $29 billion. The first funding source, the uncompensated care pool, reimburses hospitals for the care of uninsured patients and Medicaid patients for whom the hospital does not get paid. The second funding source is the delivery system reform incentive pool payment (DSRIP). The DSRIP is further divided into four categories: infrastructure development; program innovation and redesign; quality improvements; and population-focused improvements. These four categories are seen as factors that can impact the cost and quality of healthcare. Through 20 regional health partnerships (RHPs), the DSRIP program reimburses participating hospitals and providers after successfully achieving projects that correspond to one of the four categories, and that are intended to improve the quality of, and lower the cost of, medical treatment. The following graph shows a breakdown of the amount of funding each RHP gets, and quantifiable patient impact (QPI) achieved in each RHP, based on data taken from the Texas Health and Human Services Commission’s “DSRIP Dashboard”.

In the above chart, the correlation between the amount of money given to each RHP and the QPI achieved is -.22, so there is a weak negative correlation between the amount of money given and the impact this money has on patients. Essentially, when more money is given to a RHP, the QPI in that RHP might be lower than in a RHP that received less money. Many RHPS have a QPI exceeding 100%. For example, RHP 8 has received about $100 million in funding, and has a QPI of about 240%. However, RHP 7 has received about $600 million in funding, but only has a QPI of 50%. This inconsistency between RHPs could negatively impact the health of Texans in lower performing RHPs because those RHPs are not accomplishing their goals of better quality and cheaper healthcare. This suggests that increased DSRIP funding may not necessarily be enough to fully achieve the desired outcomes of improving, and lowering the cost of, medical treatment because there is not a positive correlation between the money given to RHPs and their QPI.

This research is relevant to the continuing statewide discussion about healthcare costs and treatment. Texas is currently attempting to extend the Section 1115 waiver through September 2019 to allow time for the Trump administration and the 115th Congress to adopt changes to Medicaid, and then to allow for the 86th legislative session to address Medicaid after the federal government has enacted legislation. The waiver has already been extended through December 2017 after originally being set to expire in 2016. Additionally, the state’s budget for the upcoming biennium will be several billion dollars less than the 2015–2017 budget, and the legislature might end up reducing health care spending to balance the budget. This all means that the state may want to consider getting rid of DSRIP funding because the evidence shows that it isn’t effective in accomplishing its goals.

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