County changes oversight rules for Central Health

The Travis County Commissioners Court has voted to beef up the financial policies it uses to maintain oversight of Central Health.

Tuesday’s decision capped off another extended discussion about the hospital district and the transparency concerns raised in recent months by a small but enthusiastic group of activists. The same crew was on hand Tuesday morning to repeat during abbreviated testimony their demands for an independent audit of Central Health and a detailed accounting of how the district’s annual $35 million transfer to the University of Texas’ Dell Medical School is spent.

Central Health has been making the transfers each year since 2014, bringing the total tab of local tax dollars and federal grants up to $105 million. Clay Johnston, dean of the medical school, said his school is still sitting on most of that money.

Critics, including several local attorneys and activists from the League of United Latin American Citizens, have charged that the transfer is legally dubious since there is no way to determine whether Central Health’s money is being used to effect the district’s legal mandate to provide health care to low-income residents.

“It is, however, an efficient way to provide medical education and economic development,” attorney and activist Fred Lewis told the court.

Both Central Health and the medical school have insisted that there is nothing untoward about their relationship, and on Tuesday two separate county officials concurred.

“I do believe that Central Health has been transparent. Everything that I have wanted to know, I can find on their website,” county auditor Nicki Riley told the court. She also explained that she has been working with the hospital district to improve its financial reporting to the Commissioners Court.

Riley reported that Central Health’s staff has been “very amiable” in that process.

“And I have not found anything to be irresponsible or anything in regards to the financial statements,” she concluded.

Meanwhile, Assistant County Attorney John Hille stated that, based on his understanding, the district’s annual $35 million transfer to the medical school appears to pass legal muster.

“I think that what they have done thus far and the commitments and how they’re going to pursue the relationship with Dell Medical School is within the requirements of the constitution and the statutes,” Hille said.

Even with those assurances on the record, Commissioner Brigid Shea voiced hesitation. She echoed the activists’ concern that an undetermined amount of Central Health’s tax dollars are covering administrative salaries and other initiatives to help launch the medical school.

“I just want us to have a clear and transparent understanding of exactly how the public money is being spent,” said Shea. “I just think it’s part of our fiduciary duty and our duty to the community. And we can’t answer that question now. We don’t have that information.”

Indeed, nothing in the proposed oversight changes that the court approved on Tuesday would require detailed accounting for the transfer. Instead, they aligned with the draft version the court gave to staff in October.

The revisions now require Central Health’s spinoff nonprofit organizations – Sendero, CommUnityCare, the Community Care Collaborative and Capital City Innovation – to provide annual audits in addition to the one that the district was already required to provide. The changes also require the district to cover the costs of an accountant hired by the county should the court determine that any financial data sent over from the district is not reliable, timely or in accordance with state statutes.

Commissioners voted 4-0-1 in favor of the revisions, with Shea abstaining. She cited her concerns about the lack of required accounting for the $35 million transfer.

However, County Judge Sarah Eckhardt left the door open to future tweaks to the county’s relationship with Central Health.

“We can bring it back 15 times this year if we wanted to change it up,” she offered.

Officials from both Central Health and Dell Medical School praised the vote on Tuesday afternoon. Katrina Daniel, chair of the district’s board of managers, said, “We appreciate the collaboration with the county auditor and staff on the updated financial policies that were adopted today.”

The medical school’s interim chief business officer, Scott Wallace, called the vote “a great step forward for the community and our still-growing medical school.” He also reiterated that the funding the school receives from Central Health is “meant to improve health in low-income communities and among uninsured residents.”

Wallace cited a recently launched pilot program that reduced wait times for low-income patients, according to the medical school.

Photo by Larry D. Moore made available through a Creative Commons license.

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