County greenlights long-awaited performance audit of Central Health

On Tuesday, the Travis County Commissioners Court greenlit a long-awaited independent performance audit with auditing firm Mazars for $854,200. The audit will examine how Central Health has used taxpayer money, with a close eye on the controversial, taxpayer-funded allocation of $35 million per year to Dell Medical School, which began dispensing in 2014 and has continued into the present.

While voters approved that measure in 2012, many expected the money to directly fund trauma services, communitywide health clinics and the health care of those in need. After all, Central Health was Travis County’s public hospital district, and language in the original ballot measure specified the spending be “consistent with the mission of Central Health.”

But only 4 percent of that money went to clinical care, according to Fred Lewis, an attorney and outspoken advocate of the latest performance audit. (The Dell Medical School data was obtained via subpoena last June.) The rest, according to subpoena data, went to “fundraising, admissions, the dean’s office, business affairs, non-clinical research, and undergraduate medical education.”

“This is an outlier of all outliers,” Lewis told the Austin Monitor, referring to the scale of the funds paid by Central Health and the apparent lack of financial controls surrounding their administration. “‘Hey, here’s $35 million a year. We don’t know where you’re spending it. We don’t wanna know.’”

A 2017 article from The Austin Bulldog summarized the issue then, saying “Central Health, the agency created by voters in 2004 to provide healthcare services for the uninsured poor people of Travis County, has little proof of how much of that $240 million was actually used to provide indigent healthcare – services that by law is Central Health’s sole responsibility.”

Central Health released a statement yesterday, April 6, supporting the current audit and highlighting an independent audit in 2017 carried out by Germane Solutions, an auditing firm that was selected at the time by Central Health.

“Central Health welcomes an independent performance review, especially if it measures our progress since our previous independent, third-party performance review completed in 2018,” said Mike Geeslin, CEO and president of Central Health.

The release went further, stating that “the earlier performance review had many recommendations to improve organizational performance, including comprehensive analysis of safety-net healthcare system gaps,” and that “since the earlier independent performance review was presented, Central Health has implemented, or is implementing, many of the recommendations.”

“The audit, I think, is a healthy thing. It’s not the standard audit that happens every year. It’s being done by a third party, and there were things identified in previous audits that said, clearly, we aren’t able to evaluate services because there were provisions that prevented us from accessing information,” Commissioner Brigid Shea said during an April 4 session of the court. “I think it’s important to have a very thorough audit that helps us answer the very important questions that the public continues to ask, and that clearly identifies what needs to change or improve.”

However, Lewis called into question the 2017 audit’s status as truly independent, pointing to Central Health’s initial resistance to the idea of county commissioners choosing the auditor, and instead assigning one to itself.

“Our draft had the commissioners choosing and controlling the auditor. Central Health fought that, and they controlled and hired the auditor, Germane,” Lewis said. “It matters who hires and controls the auditor because we didn’t trust Central Health. You don’t want someone you suspect of misdeeds controlling the audit.”

To date, the money paid to Dell Medical School by Central Health totals $315 million, with 73 percent of it going to general administration.

According to Lewis, a deposition of Dell Medical School officials showed the medical school has no financial controls for the allotments, which is uncommon given their volume and tax-funded origins.

The original ballot measure, which was approved in 2012, stated that “funds will be used for improved healthcare in Travis County, including support for a new medical school consistent with the mission of Central Health, a site for a new teaching hospital, trauma services, specialty medicine such as cancer care, community-wide health clinics, training for physicians, nurses and other healthcare professionals, primary care, behavioral and mental healthcare, prevention and wellness programs, and/or to obtain federal matching funds for healthcare services.”

A series of public records requests at the time sparked further questions over the transparency of the funding.

“Starting in 2017, taxpayer groups, civil rights groups – including the League of United Latin American Citizens – and health care advocates started asking for a performance audit of Central Health,” Lewis said. “Part of the focus was on the medical school because they at that time had gotten $105 million in three years.”

Of the latest audit, Lewis said, “I’m very excited. I think folks want independent, objective evaluation so that the community can make its own decisions, whether they think this comports with the values of the people of Travis County.”

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