Central Health nominee stirs up policy questions

The chair of the Central Health Board of Managers strongly suggested that City Council may be causing problems for the board by appointing a new member with ties to a major hospital.

In an interview with the Austin Monitor Tuesday, board Chair Katrina Daniel said that Julie Oliver, whose appointment to the board Council is scheduled to vote on June 15, would face a “big challenge” in balancing her duty to serve the community with her day job as an executive at St. David’s HealthCare.

Central Health, a tax-funded public authority, provides medical care to low-income residents of Travis County through numerous public clinics as well as through partnerships, most notably with the Dell Seton Medical Center at the University of Texas, which it pays more than $30 million a year as part of an integrated care initiative.

The way Daniel sees it, Seton only has one major competitor in the area: St. David’s. As a result, she said, Oliver will frequently find herself faced with decisions that could either benefit her employer (by directing it new business) or harm it (by directing business to its chief competitor).

“I think if I were in Julie Oliver’s shoes, I might have a hard time figuring out how I do the business of my employer and do the business of Central Health, keeping both organizations’ interests at heart in the decisions I’m making,” she said.

Daniel stopped short of recommending that Council reject Oliver’s application, but said that she “would hope that City Council would understand that this might not be as simple and straightforward” as Oliver filing an affidavit disclosing her conflict or abstaining from votes that directly affect her employer.

Oliver told the Monitor that she did not believe it would be a major challenge and said it would be hard to find somebody qualified for the position who did not have ties to one of the two major health care organizations in the area. She said she would definitely recuse herself from votes relating to payments Central Health makes to St. David’s (and other hospitals) for providing uncompensated care.

The board does not have a formal conflict of interest policy beyond state law, which requires public officials with a “substantial interest” in a business entity to abstain from votes that will have a “special economic effect” on that entity. Officials are deemed to have a substantial interest in a company if at least 10 percent of their annual income is derived from the company, if they own 10 percent of a company’s stock or if the shares they own are worth at least $15,000.

The law is unclear, however, about whether votes impacting a competitor of one’s business represent a conflict.

Anthony Haley, who served on the board for one term, stepped down in December 2012 after he said City Council members suggested that his relationship with Baylor Health Care System might present a problem. Haley found the suggestion absurd, he told the Monitor in an interview. At the time, Baylor had no facilities anywhere near the Austin area.

The same month that Haley stepped down from the board, Baylor announced a merger with Scott & White Healthcare, which had operations nearer to Austin, but still none in Travis County, noted Haley.

“Central Health had nothing to do with Scott & White,” said Haley in an email. “It still does not.”

Haley said he has been urging Central Health to put in place its own conflict of interest policy for years in response to what he describes as a pattern in which ties to Seton were overlooked but links to other health care organizations were viewed as a threat.

He had other colleagues who were employed by the UT Medical School or were formerly employed by Seton, he noted, who were not asked to resign.

“I think it is very clear, given the inconsistent history of conflicts of interest, whether they were made up conflicts or real conflicts, there needs to be a unified policy between the city and the county. … The city and county officials have a responsibility to come up with a policy,” he said.

Another former board member whose tenure was cut short by concerns over potential conflicts is Brenda Coleman-Beattie. The Travis County Commissioners Court declined to reappoint her to a second term after she took a job with Austin Travis County Integral Care, a mental health organization that receives funding from Central Health.

She agreed that the board’s conflict of interest policy had been inconsistent.

“The inconsistencies are varied and several,” she told the Monitor.

Asked whether it appeared that associations with Seton were not taken as seriously as connections with rival health care providers, she said, “I guess on the surface it would appear that way.”

Holly Gummert, an assistant Travis County attorney, said that the Commissioners Court opted not to reappoint Coleman-Beattie due to “the doctrine of incompatibility,” which she described as a situation “where one person is occupying two offices and one office may impose policies on another.”

Gummert also said that a number of board members have disclosed their ties to health care organizations and abstained from votes that might affect them. Former board member Tom Coopwood, a retired general and trauma surgeon in private practice, recused himself from 19 items relating to his former employer, she said. Former board member Rosie Mendoza also disclosed that her accounting firm had a contract with Austin Travis County Integral Care and recused herself from items related to Integral Care funding, said Gummert.

Reached by phone, Mendoza, who was chair during part of Haley’s tenure, declined to comment on Haley’s criticisms of the board’s practices and said that the board typically relied on advice from its legal counsel on conflict of interest matters.

This article has been corrected. It originally identified Tom Coopwood as a retired Seton doctor when he, in fact, had a private practice.

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