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Building an ESD System for Texas - Report Finding

Note: To help the reader navigate this report, a chart of acronyms is provided at the beginning of Chapter 2 in Exhibit 1 .

2.8 Building an ESD System for Texas

2.8.2. Report Findings

While the services and structure of the agencies are different, there are several areas in which the findings were similar. These are discussed below.

Issues and Concerns

In the interview process with state agency staff and representatives of other entities such as advocacy groups and retail associations, and in research from other states, several issues and concerns were identified consistently throughout. The frequency with which these issues were discussed points out the significance of these concerns and validates the need to address these in an ESD system. The ESD strategies that are included in this report seek to address these issues to the greatest extent possible. These issues are presented below:


Privacy of information is a significant concern and affects many aspects of an ESD system. One is the safeguarding of actual information stored within the system; another is the security of the system storing that information. Each requires various methods and levels of protection. Research suggests that the higher the level of security, the more complex use and access become and, as might be expected, multi-level access systems generally carry the highest degree of protection. Additional research will be required to determine the best fit for the Texas ESD system that will achieve the appropriate degree of protection while still offering a useable system. It must also recognize the importance of the public's perception and belief in the security of the system regardless of the level of security actually built into the system.

The federal government has also identified privacy as an issue and has launched an initiative to protect health care information. Regulations relating to the Health Information Portability and Accountability Act (HIPAA) could have an impact on Texas' ESD system, and final regulations must be reviewed prior to implementation of an ESD system.

Ownership of Data/Consent/Access and Confidentiality

Ownership of data, consent to release, and access to data are all factors in the overwhelming need to ensure client confidentiality. It can be accurately stated that every group in the business of providing state services is committed to protecting information about those who receive those services. This need is reinforced and driven by both state and federal laws (such as HIPAA mentioned above) that mandate client confidentiality and limit with whom and why data can be shared.

An ESD system must include a method for establishing parameters around which ownership and authorization for accessing data is clearly defined. To be successful, the system must offer a level of comfort regarding secured data that satisfies users of services, as well as meeting the requirements of the related laws and regulations.


In order for any ESD system to function and operate effectively, it must perform the desired tasks or functions efficiently and effectively within parameters as deemed appropriate for the specific transaction. Standards for performance must be established that define these parameters to ensure acceptable speed and reliability of hardware, software, and interface devices. The system or systems must also be capable of maintaining tracking data and documentation of events in order to meet required federal and state standards.

System Administration

Independent agency operations of ESD systems pose unnecessary duplication of effort and expense, and increase the complexity for stakeholder involvement with development of multiple systems. In addition, it increases the probability of missed opportunities that can be gained when building upon an existing infrastructure. An ESD system that seeks to take advantage of all potential opportunities and to encompass delivery of a variety of services provided through multiple agencies within a single infrastructure will require an administrative structure that can be responsive to the needs of each participating entity. In the design of the TESD recommendations, consideration is given to options that can provide an efficient structure and still maintain the integrity of the system, the federal, state, and agency rules and regulations, and the needs of the user.

User Acceptance

As referenced in the chapter on the conceptual framework for ESD, current technology offers a broad spectrum of options for ESD. However, some of those on the extreme-such as a 'citizen card' used by everyone, are not likely to be widely embraced in these early stages of ESD, and would not be affordable systems. From another perspective, a system that limits ESD to simply a Tier 1 or 2 level does not take advantage of the wealth of available technology nor does it build the road map for expanding the system as technology improves and becomes more cost-effective.

A user-friendly system is one that is easy to use, not invasive, responsive to need, and affordable. It must also take into consideration the limitations of some segments of the population such as people with physical or mental disabilities, and it must accommodate multiple languages and cultures. Only then will the system have the potential to gain acceptability by providers and users alike.

Retailer Concerns

Point-of-sale retailers and other vendors will continue to be major players in the success of ESD systems in Texas. Many retailers participate in the current Lone Star EBT system, and some will participate in the El Paso WIC pilot which will use the hybrid Lone Star Card system. Through their experiences, issues and concerns have been identified that must be addressed in the development of any expansion of the EBT system in Texas. Some of these issues are:

  • Complexity of the system - the system must be simplified for use by inexperienced store clerks and checkers and require minimal training;
  • POS devices must be integrated or compatible with other systems - retailers cannot function with a counter full of card readers and scanners;
  • Retailers and grocers cannot become the 'bank' for clients without checking accounts - the ESD system must include access to benefits through use of ATMs and other alternatives;
  • ESD equipment must be affordable; and
  • Fraud and error reduction built into the system would be important for acceptance of new applications by retailers.

One Card vs. Multiple Cards vs. No Card

Finding the perfect tool or interface device will be a challenge because the stakeholders have various opinions about the best option. Some want their own unique card, others want a multi-purpose card, while others want a method that requires no card. The interest in some arenas is to expand the use of the current white Lone Star Card. Others are opposed to this option because of the perceived stigma of welfare linked to the card. The options are many, not only because of the number of devices available, but also because of the combinations that can result. In addition, whatever option is recommended in the short run, may not be the option of choice as technology advances.

Another factor that will affect the decision regarding the card options is the issue that using more than one card, like the magnetic stripe and smart card, requires different reading devices. Costs of these devices and software modifications must be calculated into the cost of projects. Space for multiple readers also can be problematic if single readers can not accommodate both cards.


Costs will include those related to agencies and the state, to clients, retailers and other vendors, and include the following:

  • Hardware;
  • Software;
  • Interface devices;
  • Transactions;
  • Administration; and
  • Other costs.

Some of the issues are: who pays for what components; how much is too much to pay; and how costs are allocated. Costs for equipment and transaction fees are a major concern for the retailers, and transaction fees or the inability to charge for transactions has been a factor discouraging participation of the banking industry. The client population that currently uses the Lone Star Card can hardly afford the cost of transaction fees, and if additional services for the low-income population are added, clients should not have to take on the added burden of transaction fees. However, other client populations could assume some transaction fees.

Agencies that participate in the ESD system have concerns about cost for the interface devices and for administering the system. This becomes particularly apparent when exploring the options for administration and the impact a centralized administrative structure would have on agency allocation of funds and cost allocation plans.

Commonalities in Service Delivery Functions

One of the significant findings that surfaced through the interviews and research process is commonalties across agencies. While the programs and services are unique in nature or in area of specialization, some processes and functions are similar. The comparison of these functions allows exploration of common solutions or approaches for increasing or improving the quality or efficiency of service delivery and management. Exhibit 4 illustrates some functions common to a number of state programs. These functions include cash payments or other benefits with a financial value; identification of eligibility and authorization or access to services based on that eligibility; provision of health information; tracking of client participation and the provision of services by providers; and transportation to support delivery of other services.

Exhibit 4
Program/Service Cash or
Financial Value
Health Information Service and Participation
Tracking/Payment to Providers
Service Related
Texas Department of Health
(prescribed benefits)
  X X  
Medical Transportation   X     X
Texas Department of Human Services
Food Stamps X        
TANF X        
Medical ID   X      
Long Term Care       X  
Special Nutrition Program X        
Refugee Assistance Payments X        
Texas Workforce Commission
Unemployment Insurance Payments X        
Subsidized Childcare   X   X  
Workforce Training & Support   X   X  
Workforce Transportation         X
Office of the Attorney General
Child Support Payments X        

Texas Department of Mental Health/Mental Retardation

In-Home Community Services-home modification/equip. X X      
Texas Department of Mental Health/Mental Retardation (continued)
In-Home Community Services-training & support services   X   X  
Texas Department of Protective and Regulatory Services
Childcare for Foster and Adoptive children   X   X  
Various In-Home and Community Services   X   X  
Texas Rehabilitation Commission
Vocational Rehabilitation   X   X X
Health and Human Services Commission
Children's Health Insurance Program   X X    
Employees Retirement System
FLEX Card   X X X  
State Employees
General ID
Unbanked Payroll X        
Systems Access   X      
Facilities Access   X      
Medical Data   X X    
Travel Expenses X        
Source: Texas Comptroller of Public Accounts.

Current ESD Activities in Selected State Agencies

The information gained from the agency interviews and other contacts has helped to create an understanding of the scope of past, current, or planned ESD activity in these agencies. Exhibit 5 summarizes these activities. It should be noted that almost all Texas agencies have extensive Websites with the use of these sites varying among the different agencies. Most sites link to other sites through which an individual can navigate to other related agencies and other Websites.

Exhibit 5
Agency Current ESD Uses Early ESD Initiatives
(no longer operational)
Department of Public Safety Texas Driver License - has magnetic stripe and bar code. Finger images are being collected. All ESD mechanisms are currently used in-house only, and duplicates information printed on the license.  
Employee Retirement
System - Tex Flex
ERS implemented a magnetic stripe FLEXcard for accessing funds from employees' reimbursement accounts starting on Sept 1, 2000.  
General Services Commission - State Procurement and Travel Card Custom State of Texas purchasing and travel cards with state seal.  
Texas Department of Protective and Regulatory Services Judicial Web site puts information about children in PRS custody in the hands of judges.  

Department of Human Services - Food Stamp and TANF Programs, Long Term Care

Currently deliver Food Stamp and TANF benefits using the Lone Star magnetic stripe card. Also use finger imaging on all applicants for these programs.
Long term care facility information available to consumers on the Web.
Texas Department of
Health - WIC Program, Vital Records database, Vendor Drug Program
Electronic smart card system for WIC now in planning stage. Expects to link with Lone Star Card by using the same card format and providing for this card to be used for TANF and Food Stamps.
Internet used to issue and update a variety of professional licenses.
Internet to access vital records.
Vendor drug POS electronic claims payment system with on-line claims adjudication.
Texas Rehabilitation Commission - Vocational Rehabilitation And Disability Determination Electronic case file system - contains case information viewed by vocational rehabilitation counselors. In late '80s - early '90s, a small pilot in the Houston area was done using laser card technology, but it was not found to be practical.
Texas Department of Transportation Some large local transit systems have fare cards and readers.

Tried pilot system in Temple, using simple bar coding, with positive results.

Department of Mental Health/Mental Retardation Currently completing statewide rollout of electronic client record system in state hospitals and state schools. About 10 years ago tried card-based service authorization and payment system using a telephone interface for in-home community services. Not acceptable due to inadequate audit trail. Only used 8-12 months.
University of Texas at Austin School of Business is piloting smart card technology for building and computer systems access for students and faculty.  
University of Texas Medical Branch at Galveston Currently two smart card systems: employee ID; and campus security. Planning for enhancements, including a procurement system using e-commerce, systems security, and on-campus use for food, library, and other purchases.  
Texas A&M University Uses magnetic stripe card for campus meal plan, controlled access, and as a debit card with participating merchants.  
Source: Texas Comptroller of Public Accounts.

As demonstrated in this exhibit, and citing only a small group, these state agencies are using ESD mechanisms in a number of ways to increase their efficiency and effectiveness. Taken collectively, these projects represent an impressive willingness to embrace new technology.