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Central Health budget hearing sparks debate over medical school funds

About an hour into a discussion on Central Health’s budget that became a debate over the health district’s relationship with University of Texas’ Dell Medical School, Travis County Commissioner Gerald Daugherty announced he was fed up.

“I have sat through two, three years of this stuff, and I’m, quite frankly, I’m kind of up to here with it,” Daugherty said, “because I do think that there is a gap with what some people think the marriage between Central Health and the UT med school (should be).”

The Commissioners Court reviews Central Health’s budget and is scheduled to approve the 2018 spending plan later this month. During a routine budget hearing Tuesday, a few frequent Central Health critics stood up during public comment to question the use of taxpayer funds to cover the medical school’s compensation costs.

Travis County voters agreed in 2012 to raise property taxes for the hospital district to contribute $35 million a year for Dell Medical School. A report issued last week by the medical school showed that in fiscal year 2016-17, most of the taxpayer-contributed funds were used on compensation, typically the largest budget item for medical schools.

RELATED: Dell Medical School touts growing number of residents in new report

“We now know that about 84 percent of all Dell salaries and compensation are paid for with Central Health dollars,” said Fred Lewis, an attorney and Central Health critic, based on figures he said came from public record requests he received. “It’s hard to understand how that benefits the poor.”

Lewis and others in the community have argued that the contribution to Dell is unlawful because it does not directly benefit the indigent, which is Central Health’s core mission. Central Health and Dell have defended the relationship, pointing to voter approval and noting that the school will produce residents and physicians who practice in the community.

Daugherty said he didn’t think the language of the proposition that voters approved was confusing and that it is “unfortunate” there is still a lack of agreement on the subject. Commissioner Brigid Shea, however, said she shared some of Lewis’ concerns about Dell’s use of the money.

“To me, it’s not about whether or not this relationship with Dell Medical School is good,” Shea said. “It is good, but I think we need to be mindful about how the money is being allocated.”

Other commissioners suggested the problem lies more in a lack of communication with the public.

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Commissioner Jeff Travillion said “people are generally suspicious and concerned about everything,” but the way to build trust is to communicate better, such as by issuing more public reports and partnering with local media to broadcast Central Health meetings.

Commissioner Margaret Gómez echoed his comment. “I think Commissioner Travillion is right, get down to basics, let’s explain those things to folks so they’ll understand it better,” Gómez said.

Shea’s questioning of Central Health officials was so pointed that County Judge Sarah Eckhardt warned it could veer into areas that might be covered in a deposition, if critics decide to sue the health district and Dell officials.

“If this is in the nature of a deposition in preparation for a lawsuit, we should really leave that to the legal process,” Eckhardt said.

So far, no such lawsuit has been filed. Lewis referred comment on whether he planned to sue to attorney Bob Ozer, who said he had no comment.

RELATED: At public meeting, Central Health’s reach, use of funds criticized

Central Health board member Clarke Heidrick told the court that a performance review being done by a third-party consulting firm seeks to answer once-and-for-all whether the district’s use of those funds is appropriate.

“The audit will be the test,” Heidrick said.

Ozer told commissioners during public comment that review does not include Sendero Health Plans, Central Health’s nonprofit Medicaid health maintenance organization.

“There has to be some kind of process … so that we can make sure the audit is full, deep, credible and independent and that there aren’t any things pulled out that may be controversial,” Ozer said.

Central Health officials expressed willingness to include Sendero in this review or conduct a separate review, though they noted that an upcoming state audit will also be reviewing the program.

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