September 10, 2024
Central Health President & CEO tells Travis County commissioners:We remain committed to “ongoing improvement and operational excellence.”
AUSTIN – Central Health, Travis County’s hospital district, received a clean bill of health today (Tuesday, September 10), as Mazars USA presented its final report of its performance review to the Travis County Commissioners Court.
Steve Herbst, principal of Forvis Mazars USA, opened the public hearing by announcing to the court, “We are happy to report that there were no reportable conditions or violations of law that we found as part of our performance review.”
In Mazars’ final written report presented today, the consultants write, “Central Health’s goal of building a high-performing healthcare system is actively being realized … to provide key services to Travis County’s medically indigent population.” Central Health plans, pays for, and provides healthcare to Travis County residents living at or below 200% of the federal poverty level (approximately $29,000/year for one person, $60,000/year for a family of four).
Elsewhere in the report, the Mazars team notes that “Central Health’s health equity assessment and plans are commendable.” The district’s Healthcare Equity Plan is a seven-year, $800 million investment program to close gaps in Travis County’s safety-net healthcare system.
In the first year of implementation, among many other milestones, Central Health has opened three specialty care clinical sites in East Austin, launched nearly 20 new clinical and diagnostic service lines, and provided direct care in nearly 4,000 patient visits. This has all happened since Mazars began working on its review in the fall of 2022. Next year, the district expects the number of visits to increase tenfold.
The Mazars report does highlight areas for improvement that Central Health will pursue – refining how the district measures healthcare quality, responds to the rapidly changing demographics in many parts of Travis County, and documents its internal processes and controls.
A separate analysis of Central Health’s affiliation agreement with the Dell Medical School at the University of Texas found the $35 million Dell Med receives annually from Central Health – a funding agreement authorized by Travis County voters in a 2012 tax rate election – is supporting “a comprehensive range of services” and complies with the terms of the agreement.
Speaking to the Commissioners Court, Dr. Patrick T. Lee, president and CEO of Central Health, noted that “overall, this result reflects the hard work of many people over many years. Our last performance review in 2018 prompted us to do the community-wide needs assessment” that formed the foundation of the Healthcare Equity Plan.
In its response to the Mazars report, which can be viewed below, the hospital district points out that the 2018 review, by Germane Solutions, benchmarked Central Health against other Texas urban hospital districts in Dallas, Houston, San Antonio, Fort Worth, and El Paso
All of these, and Central Health, are governed by the same state statutes (Ch. 281 of the Texas Health and Safety Code), provide similar services to similar populations, and have similar relationships with medical schools in their area. The Mazars report does not include these benchmarks. In its written response, Central Health notes “it has serious concerns about the report’s methodology, its characterization of key elements of our delivery system, and the lack of foundation for some of its recommendations.”
Central Health was not a party to the contract between Mazars and Travis County for this review, and Central Health staff did not have input into the development of the scope of work.
“Central Health plays a role in the local health and human services system that’s unique,” Ann Kitchen, chair of the Central Health Board of Managers, told commissioners. “And what we know and what we’ve learned about building a safety-net healthcare system is valuable knowledge that we think may have been undervalued here.”
Ultimately, both the Mazars consultants and the Commissioners Court acknowledged that Central Health is improving its performance in real time. “I have a great deal of confidence in Dr. Lee as a clinician, as a person who is listening to the community, and who is going out, into, and becoming a part of this community,” said Commissioner Jeff Travillion.
“Central Health has really improved, and the situation is much different today than it was in 2022 when we commenced this process,” said Commissioner Brigid Shea. I think Central Health has embarked on a really inspiring commitment to provide healthcare to the poor.”
Read the Full Report and Central Health’s Response
Executive Summary – Management Response to Mazars Performance Review
The Travis County Commissioner’s Court engaged Mazars USA LLP (Mazars) to complete a performance review of Central Health on the County’s behalf. The report was completed in August 2024. Central Health agrees with the report’s primary conclusion that there are no violations of law or significant deficiencies in how Central Health operates. Central Health also agrees with Mazars that the Dell Medical School’s use of the $35 million it receives annually is in compliance with the terms of the Affiliation Agreement. We acknowledge relevant best practices identified, particularly related to process documentation and the expansion of quality metric reporting. We will consider those as we continue to develop our system of care as we implement our Healthcare Equity Plan.
Despite some areas of agreement, Central Health has serious concerns about the report’s methodology, its characterization of key elements of our delivery system, and the lack of foundation for some of its recommendations. Central Health was not a party to the contract between Mazars and Travis County for this review, and Central Health staff did not have input into the development of the scope of work.
Failure to Benchmark to Texas Chapter 281 Hospital Districts:
The report fails to compare Central Health with any other hospital district, including the five other major urban hospital districts in Texas. These hospital districts operate under the same legislation and regulations, provide the same services, and have similar relationships with providers and academic institutions. In 2018, Germaine Solutions completed a review of Central Health that benchmarked its performance to other Texas hospital districts. That review produced key recommendations for Central Health’s direct provision of health care services, which Central Health has now implemented. Despite having this example to work from, the Mazars team benchmarked Central Health to Texas Medicaid managed care standards, which has produced a broad mischaracterization of Central Health’s provider network, policy and procedure framework, and contracting model. By failing to benchmark Central Health against Chapter 281 hospital districts and using inapt comparisons (principally in the insurance context), many of the report’s claims regarding Central Health’s performance are neither well-informed nor actionable.
Failure to Understand and Describe Central Health’s System:
From its inception, Central Health has implemented a contracting model to provide healthcare services to the safety net population. Central Health provides the majority of primary care services to our population through our public center, co-applicant Federally Qualified Health Center (FQHC), CommUnityCare. Our Master Agreement and Omnibus Healthcare Services Agreement with Ascension are designed to ensure broad-based access to specialty and hospital care. Along with these two major contracting structures, Central Health also contracts with approximately 125 additional service providers to deliver services to over 155,000 patients annually, across the continuum of care. Unfortunately, Mazars did not accurately describe Central Health’s contracting model and the relationships created via that model. These errors and mischaracterizations create confusion and leave incorrect impressions about the true breadth of Central Health’s contracts.
Central Health’s Relationship with Ascension:
In the Executive Summary on page 7, the report states that a performance review of Ascension is out of scope and thus was not done. Given the fact Mazars didn’t conduct any review of Ascension, it is difficult to understand how Mazars is able to conclude in Section 2.1 (page 21) that there are “gaps created by what Ascension was unable to provide”—as opposed to care gaps created by what Ascension was obligated and capable of providing but did not. On the whole, the report implicates subjects at issue in Central Health’s lawsuit against Ascension—all in the context of a report that makes clear that Mazars did not conduct fact-finding or assessment related to Ascension.
For clarity, Central Health has two major, foundational agreements with Ascension. These agreements are called the “Master Agreement” and the “Omnibus Healthcare Services Agreement.” These agreements—in addition to reaffirming Ascension’s primary responsibility for clinical specialty care and hospital services—also discuss the concept of an “integrated delivery system” (IDS). In 2023, after years of problems followed by additional years of negotiation and mediation, Central Health took the extraordinary step of suing Ascension for various material breaches of these agreements—but most importantly for not providing the obligated levels of health care services to Central Health patients. The IDS—and the extent to which the parties are (or are not) living up to their obligations under it—is directly at issue in the lawsuit.
The Affiliation Agreement with the University of Texas:
Central Health, the University of Texas at Austin (UT), and the Community Care Collaborative (CCC) are parties to the 2014 Affiliation Agreement. The Mazars’ report states that “Central Health should be afforded sole governmental authority in the Affiliation Agreement to properly oversee the use of funds.” The funds referenced here are the $35 million annual payment to UT/DMS that the CCC (or, if the CCC lacks sufficient funds, Central Health) makes under the Affiliation Agreement. The Affiliation Agreement was a heavily-negotiated contract with an initial 25-year term. Central Health cannot unilaterally make changes to this contract without the agreement of UT. Central Health wishes to make clear that it does not agree with this recommendation.
Further, neither the “full control” nor the “sole governmental authority” standard that Mazars cites in its recommendations are relevant standards for Texas public-entity spending. Central Health does not know how or why Mazars decided that “full control” or “sole governmental authority” was the relevant standard, but it is not. Central Health cannot implement any recommendation that is based on an erroneous standard.
The Community Care Collaborative (CCC):
The CCC currently serves as a platform for ongoing, important discussions between Central Health and Ascension on issues that range from individual patient care to broader collaborative care initiatives to contractual and organizational governance. The report contains several errors regarding the CCC. in Section 2.4 under Recommendation AA.5 (page 55), Mazars recommends dissolving the CCC if it remains unfunded. Nowhere in the report is there evidence of any analysis of the practical or legal implications of dissolving the CCC. Nor did Mazars engage Central Health in any discussion of what impact the dissolution of the CCC would have. Accordingly, Central Health is unaware of—and doubts the existence of—any analysis by Mazars of what implementation of this recommendation would entail. Central Health wishes to make clear that it does not agree with this recommendation.
Conclusion:
Despite Central Health’s many serious concerns with the Mazars report and some of its recommendations, Central Health is committed to internalizing and addressing several of the findings and recommendations in the report. It should give our community reassurance that Mazars concluded that there are no violations of law or significant deficiencies in how Central Health operates. Likewise, our community should appreciate Mazars’ further independent validation that DMS’ use of the $35 million it receives annually is consistent with the terms of its contract with Central Health. Those are weighty and important pronouncements with which Central Health agrees.
Finally, Central Health wishes to reiterate that it remains committed to ongoing improvement and operational excellence. We value our relationship with the Travis County Commissioner’s Court and acknowledge the value of regular performance reviews when they are done well.