Travis County Commissioners Court
March 22, 2005
Item 8
Number 8, consider and take appropriate action on patient landing fee currently charged to hospitals for receiving a patient via starflight.
>> thank you. Good morning, I知 danny hobby, the emergency services coordinator. And with me today to my right is casey pena. Who is our program manager for starflight. And to his right is willie culverson, who is the aviation director. To my left of course is barbara staley, executive assistant. I would like if I could to just give a summary. You already have the information of course in your backup. This is something that this particular program has been considering for quite some time. And it's in relationship with the hospitals. As you know, we have two fees in starflight. One is the landing fee, which is the fee that we charge the hospitals in regards to transports. And the other is a liftoff fee, which is the fee we charge patients. So today we would like to bring forth a recommendation that Travis County consider implementing a six-month moratorium on the landing fee charged to the hospitals. This will give us time, staff time to evaluate if this fee is truly a disincentive for hospitals to use starflight and removal of this fee increases the number of requests for service. That's the bottom line is how will this affect our revenue. And based upon conversations that have been going on for quite some time with the hospitals, it is our feeling that this is a disincentive and so therefore we would like to test it. We also feel that a moratorium, a six-month test period is appropriate so that we're not saying that we're going to eliminate the fee entirely. But that we test it to see what indeed it does do for the program. Currently we're charging $425 per patient. And there's a history in regards to this fee that goes back quite a few years. In fact, it was calculated differently I believe up until 1999. And we made it the 425 based on it being an easier calculation for all involved. But today we are here to discuss with you and recommend to you that we would like to test this by putting a moratorium on the fee for a period of six months, which would begin March one and go back to March one, 2005, through September 30th, 2005.
>> [ inaudible ]? What we approved? I think what has been approved, Commissioner, is that we are potentially losing some revenue by the fact that we have this landing fee. We are the only aircraft, helicopter medical service that actually charges a landing fee. There is no one else, no other carrier in this area, no other carrier in the state of Texas that charges the hospitals this type of landing fee.
>> what is the revenue?
>> the revenue is very important to us and that's why we're proposing this is because we want to test to see if our revenues will increase if we eliminate the fee. And so is this a disincentive for the hospital? For the hospital regarding our program if we have the landing fee, if we do away with the landing fee does it increase our revenue? And so we feel like that it's -- it's important for us based upon what they're telling us that we're the only ones that are charging this landing fee, and it's a disincentive and then it's important for us to test it and see.
>> I guess it doesn't make sense to me.
>> it sounds counter intuitive. A good portion of what we make in terms of how we offset the direct cost is what happens in terms of our out of county transports. And we're hearing that they don't want to use us because the hospitals wind up being charged this fee whether the person winds up being admitted or not, so it is a disincentive. And especially -- it's less so at brack, but it's absolutely clear in terms of the other hospitals not wanting -- not directing starflight to come in there. But if we wind up getting, for example, air facility transfers, the heart hospital and some other kind of hospitals, we can easily offset it. Now, that's the intuition, but we don't know it for sure. We want to kind of like challenge them in this is what's standing in the way of them calling starflight and especially the interfacility transfers, which are paid things that would bring us so much more money on the other end. We can't just do this on the surface and say okay, we're going to do this. This also requires interaction and talking to the hospital administrators and basically saying this is your chance to put up or shut up kind of, to be quite frank, on this issue. Because they kept saying we don't use you because of the landing fee. Okay, fine. If the landing fee goes away during this designated time period, are we going to see what you claim is the only thing standing in the way of you using starflight and for us to be able to give some dollars that will more than offset what we get off the landing fee. I know it sounds very counter intuitive and we spent a lot of time on this.
>> there was something I should have mentioned, which Commissioner Sonleitner, you brought up. And that is the landing fee right now only effects the out of county because we do not charge in-county, Travis County residents.
>> this is something that the hospital pays?
>> this is a fee that the hospital pays.
>> and what happens with the other carriers is they charge the patient 100 percent.
>> that is correct.
>> so we will be doing the same thing basically. And at the end of six months we would know basically whether the number of flights has increased.
>> that's correct.
>> such that that we end up -- we net out at about the same revenue is what we're hoping.
>> that's correct.
>> or better.
>> or better. Again, the reason why we're doing this is to not try to stay at the status quo, we're looking at increasing our revenue. So that's why we're going forward with this proposal.
>> two things basically whether it's a Travis County hospital or the patient and the out of county hospitals really are taking the position that they don't pay, the patients ought to.
>> and if they're indigent? They don't pay it, right?
>> it's not the out of county hospitals that pays the fee, it's the receiving hospitals here.
>> okay.
>> they pass it on to the patient, but what if the patient is indigent, they don't pay it, right? So we kind of eat that?
>> currently the hospital fee is collected 100%. So whether -- because the hospitals have the ability to pay whether the patient does not. So literally what we're looking at decreasing the revenue on the landing fee side and increasing it on the patient charge side. That's the goal.
>> well, I trust the committee...
>> it seems like it is worthy of a test period. It's one of those counter intuitive things, but basically I think it will give us an opportunity to say will we see those absolute changes. And especially there are some other hospitals, heart hospital, south Austin, some of the other hospitals, it's like the numbers that we get are so few, it can only go up.
>> I知 nervous on that too. I don't know that -- I am convinced that it's worth a try for six months, and I am convinced that we're probably not -- last year we collected about 160,000, so we're really subject to 80,000 since we're trying for half a year. The thing that I feel the most is that private is pretty good about being private. You get in their pocket and they're going to find a way to get back, number one. Because that's really what we're trying to do is compete with them since they're not charging anything. So that makes it a little -- that makes me a little nervous. The other thing that makes me nervous is if this doesn't prove awe wnd we have to go back, I don't know what the hospitals are going to go when they've gotten used to you guys not charging us. So there is some things that make it seem a little -- why would you try to do this? But I am convinced after having a case here that says there's a decent opportunity because they're the ones that have been discussing it with the hospitals.
>> and dr. Rock.
>> and dr. Rock. And so I don't think that we're subject to lose anything much it is probably worth a try because then we really are competing on a more level playing field than we are right now. I知 with you. When I first heard of it, it kind of makes me nervous, but you probably are running down the hallway screaming if I知 nervous. [ laughter ]
>> if you take the $80,000 that is in play here and it's on an out of county, for example, around $2,000, you do the addition, you need 40 flights to offset that revenue. And that's one week. I think that's a pretty decent opportunity that we could get at least one more flight a week for out of county and potentially so much more than that. To me it -- it seems to counter intuitive, but it's like we're focusing on the landing fee and not the money in what makes this program operate less costly is the patient fees. And it's standing in the way and too many hospitals are saying it's in the way. And they are the ones that are dictating whether that helicopter is chosen. Some of the others are getting a competitive advantage in the marketplace simply because of the landing fee.
>> from our perspective, the only difference is the bills for $425 comes from starflight and not the hospital. They're not going to turn around and bill the patient for the 425 they paid us?
>> no, sir.
>> that's one of the reasons they've been unhappy. I think it in the sense that -- [ inaudible ]. Where do they put that kind fd thing, it goes in the overhead. It's not something where if you have starflight and they add 425 to the bill.
>> I think I can figure the outcome.
>> so the ones that may qualify on this?
>> on the interfacility flight, yes. On the other flights it's normally the agency for that jurisdiction.
>> okay. So you're going to keep records over the next six months I take it.
>> yes, sir.
>> and we'll look at a six-month point.
>> actually, what I was planning on doing now that we're giving you quarterly reports regarding starflight on interlocals, I thought I would include that so we can see how we're doing.
>> okay. Motion?
>> I move that we go with the six-month moratorium test period related to the patient landing fee.
>> any more discussion? All in favor? Show Commissioners Gomez, Sonleitner, yours truly voting in favor.
>> I abstain. The reason I abstain is because my wife is employed with the daughters of charity and I知 submitting a sworn affidavit to the clerk with that subject matter and in that regard and recognition for my abstention.
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Last Modified:
Wednesday, March 23, 2005 10:22 AM