Critic: Proposed Financial Policies ‘Pointless’

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Commissioners Court will vote tomorrow on Central Health financial policies for FY 18

Part 3 in a Series

The Travis County Commissioners Court is scheduled to vote tomorrow on financial policies that Central Health must follow in FY 2018, which began October 1.

Sarah Eckhardt
Sarah Eckhardt

County Judge Sarah Eckhardt had been adamant at the September 19 meeting that she wanted a vote October 3, saying, “A perpetual conversation is not healthy.” At the October 3 meeting, however, she said, “Although last time I said I would take a vote today, I’m going back on that because we’re received so much new information and we’re drafting.”

John Hille
John Hille

The new information to which she referred were two new drafts prepared by Assistant County Attorney John Hille. He handed the drafts to the commissioners just as they took up the matter of Central Health’s financial policies at 1:45pm—nearly four hours after the scheduled time of 10am.

Patti Ohlendorf
Patti Ohlendorf

Another piece of new information was an October 2 letter to the judge and others from Patricia C. “Patti” Ohlendorf, vice president of legal affairs for the University of Texas at Austin.

Ohlendorf, who attended the October 3 meeting of the Commissioners Court, seeks to preserve the $35 million a year the university gets for Dell Medical School through the Affiliation Agreement it has with Central Health and the Community Care Collaborative.

The university received $105 million through FY 2017. The Affiliation Agreement calls for additional $35 million per year in perpetuity but contains no requirement for accountability for providing healthcare services for indigent, uninsured or underinsured patients. The medical school’s own reports indicates most money has been spent on salaries.

University resisting accountability

Fred Lewis
Fred Lewis

Without naming him, Ohlendorf’s letter (linked below) alluded to financial policy proposals written by attorney Fred Lewis, some of which were contained in previous draft financial policies under consideration. Those proposals are largely absent from Hille’s latest versions.

Ohlendorf’s letter stated, “…some of the other proposals we have seen that were submitted to the Court are at least in part vague, appear to be at least in part in tension or conflict with the preexisting Affiliation Agreement into which UT Austin entered, or include terms that may not be workable for UT Austin as a state institution. As the Court weighs the various proposals, UT Austin agrees that the District should structure and evaluate its arrangements with third parties to make sure those arrangements comply with applicable laws and serve Central Health’s purpose and mission.

“UT Austin also believes the existing Affiliation Agreement among UT Austin, Central Health, and the CCC (Community Care Collaborative) includes terms that meet these standards….”

In reality the Affiliation Agreement is—by design—devoid of accountability for indigent healthcare services Dell Medical School may be providing.

Clay Johnston
Clay Johnston

Instead the money is being used for the institution’s startup costs, an admission made to the Central Health Board of Managers August 16 by Clay Johnston, dean of the medical school.

According to its 2017 Community Benefit Report (see page 5), Dell Medical School:

Spent $46.1 million for Compensation and Employment-Related Expenses,

spent $100,000 on Information Technology Equipment and Software, for total expenses of $46.2 million,

and carried forward a remaining balance of $65 million.

An extensive analysis by Fred Lewis, based upon payroll records he obtained through public information requests, indicated that 83.6 percent of medical school personnel salaries was paid with Central Health funds. Of the $105 million the medical school received from Central Health through FY 2017, Lewis identified less than $3 million was spent on anything directly related to healthcare.

What’s now under consideration?

“I have two new drafts that nobody in the audience has seen at this point,” Eckhardt said October 3. “I want to allow a week for commissioners and the community to review these comments and be able to comment and vote next week, using either Version 1 or Version 2.” (Both documents are linked below.)

Hille said the only difference between Versions 1 and 2 is that the last two sentences in Paragraph 4 of Version 1 are not contained in Version 2. (Those sentences are highlighted in yellow in the Version 1 PDF linked below.)

The “Travis County Commissioners Court’s proposed order is doing essentially nothing to change the status quo,” Lewis said in an October 5 email to The Austin Bulldog.

Lewis said the order will not require an audit of Central Health’s problematic transactions involving Sendero Health Plans, Seton Healthcare Family, and Dell Medical School. There are no meaningful provisions to require medical utilization and performance records be kept. It will not require the University of Texas, Seton and others to comply with eligibility and health care service requirements of Texas Health and Safety Code Chapter 61.

“In short, it will be a feel good order that accomplishes next to nothing. No one will change their behavior to be more transparent and accountable. Pointless.”

This report was made possible by contributions to The Austin Bulldog, which operates as a 501(c)(3) nonprofit for investigative reporting in the public interest. You can help support this independent coverage by making a tax-deductible contribution.

Related Bulldog coverage:

Central Health Financial Policies Hotly Debated: $185 million given to Dell Medical School and Seton, with little to show for indigent healthcare, and $55 million more is on the way for FY 2018, Part 2 in a Series, September 29, 2017

Central Health Feedback Meetings Ill-Attended: Two public forums to gather opinions about the agency drew just nine speakers, Part 1 in a Series, August 27, 2017


2017 Community Benefit Report for Dell Medical School, undated (15 pages)

Draft order Version 1 to amend Central Health financial policies

Draft order Version 2 to amend Central Health financial policies (4 pages)

Patti Ohlendorf, vice president of legal affairs, UT Austin, letter of October 2, 2017 (2 pages)

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