Houston committee hears plan to spin out Ethan telehealth into LGC as funding nears expiration

The Houston Public Safety Committee on Tuesday heard city staff present a plan to preserve and scale Ethan, the Houston Fire Department’s physician-led emergency telehealth program, by forming a Local Government Corporation (LGC) called Ethan Health.

Dr. Pierce, the program’s physician lead, told the committee Ethan has served about 37,000 patients since the city adopted the physician-led model in 2014 and that physicians divert ambulance transport in over 90 percent of cases. He said the city estimates roughly $22 million in cost avoidance from reduced ambulance transports and emergency-department visits, though he characterized that as cost avoidance rather than budgeted revenue.

The presentation framed Ethan as a response to frequent use of 911 for non-emergent needs. Staff described the call flow: EMTs on scene connect a patient via video to an emergency physician using a Teams-based link; the physician evaluates the patient, can schedule a clinic appointment using the city-owned scheduling tool Synapse, and arrange a cab or other transport if medically appropriate.

City staff asked council to consider several related documents at an upcoming council agenda: the ordinance forming Ethan Health LGC, an interlocal agreement governing relationships between the city and the LGC, and a licensing agreement that would retain the city’s ownership of the software intellectual property. Dr. Pierce said the city would charge the LGC a licensing fee (stated in the presentation as $450,000 per year) and that the LGC would initially operate at a loss for a stub year and the first two years before projecting break-even in year three.

Chief Munoz said the program acts as a ‘‘force multiplier’’ for the Houston Fire Department and helps manage response capacity at a time the department is short about 600 firefighters. Councilmembers pressed staff on operational details: how many physicians staff Ethan (about 15 physicians working four-hour shifts to cover a 10 a.m.–10 p.m. schedule), whether Metro or other paratransit could handle wheelchair patients, and how insurer agreements would work.

Dr. Pierce said the program has an agreement with at least one insurer as a pilot and that when insurers enter into arrangements, staff can advise patients about in-network clinic options; the patient retains final choice if the recommended site is medically appropriate. Council members and staff also discussed billing: an ordinance figure for transport of $2,100 was cited, and officials noted Medicare/Medicaid reimbursements require documented ‘‘medical necessity.’’

Several council members questioned how much of the LGC start-up would require city general-fund support versus being covered by anticipated revenues. Dr. Pierce said some FY2025 supplemental funding would be requested to replace expiring grant funds and that the administration typically requests the full amount assuming zero revenue when budgeting.

No committee vote was taken. Dr. Pierce said the mayor had approved a proposed board nominating list and that council’s vote to approve the LGC would establish it; the interlocal must also be reviewed by the Texas Attorney General’s office, which has up to 30 days to review.

The committee opened for public comment after the presentation. Olivia Verdi raised questions about tax impacts, how patient billing would be handled, HIPAA compliance and whether city residents would bear costs; she also offered an idea for a location-based app to coordinate homeless services. Two representatives identified themselves as affiliated with HBSRG and said they would present later.

The committee will take no immediate final action; Dr. Pierce said the administration is tentatively scheduling the LGC and interlocal items for City Council on Oct. 23. The committee adjourned with a request that staff supply additional budget detail for FY2025.