El Paso Children’s Hospital: Taxpayer bailout not on the table, looking for solutions

Will the El Paso Children’s Hospital have to be bailed out by the taxpayers? According to County Judge Veronica Escobar, that option is not on the table. But the pressure to get Children’s on a path to sustainability is building.

ABC-7 has reported Children’s Hospital owes University Medical Center about $69 million. That debt grows by $2.5 million every month. The county is going to have to take the deficit into consideration during their budget discussion next month, especially since that’s when the county will be determining its tax rate.

“It’s important the community understand what’s at stake if we lose Children’s, we stand to lose a lot,” Escobar said.

She says just because the special committee between UMC, Children’s, and El Paso First is suspended doesn’t mean their leaders, including herself, have stopped looking for a solution.

“There is still some time to have a win-win

Escobar said UMC Chairman Bill Hanson was working on various options, and Children’s should utilize the options being created by him. Escobar has yet to see UMC CEO Jim Valenti’s recommendations. Those have yet to be made public, and won’t be made public this week since Friday’s special meeting was canceled, but Escobar said they include finding areas to cut spending and grow revenue.

“They have to present a plan to UMC,” Escobar said.

Children’s disagrees it owes $68 million in debt. Escobar told ABC-7, Children’s is claiming it’s being over charged for services, such as HR and IT, by UMC. We reached out to Children’s Board Chair Sam Legate to learn more, but did not hear back in time for this report. Her recommendation: compare UMC’s prices to those on the open market.

“Show us where they think the over-charging was because I think UMC would want to fix it,” Escobar said.

If they don’t fix it, taxpayers will be on the hook. According to Escobar, local property taxes only fund about 15 percent of UMC’s budget, The rest comes from state and federal taxes and insurance.

“I don’t think a taxpayer bailout is something that I support,” Escobar said. “I don’t even think that its something they would bring to the table.”

For now, Escobar says she is trying to meet with state and federal leaders to see if they have any resources they can bring to the table to assist Children’s cash shortfall in the long term. She also plans on bringing UMC before Commissioners Court to hear more.

“All of this will play a role in the budget,” Escobar said. “That’s why I stress to Children’s, we have to get this done before the end of the month. We have to, because July will be focused on the tax rate.”

On Tuesday at the UMC board meeting, Children’s asked the board to approve a confidentiality agreement between the two hospitals. The board didn’t approve it, but Wednesday ABC-7 reached out to Children’s to find out why they proposed the agreement. Their spokeswoman responded:

“The proposal to use a formal confidentiality agreement with UMC of El Paso is a standard business practice in the healthcare industry. El Paso Children’s Hospital, a private 501c3 not-for-profit organization, routinely enters into confidentiality agreements with other entities that are public and non-public.”

ABC-7 replied with the questions: When have you used these agreements in the past? Why didn’t you already have one in place with UMC if it’s a standard practice?

Children’s did not respond.