Seton Shoal Creek Hospital (Photo by Seton / CC by-SA 3.0)

Our local medical ecosystem is in for a shakeup – Central Health, the county’s health care district, has for years funneled millions of taxpayer dollars toward nonprofit hospital chain Ascension, which in turn treats low-income Travis County patients without charging them.

Central Health’s FY24 budget, greenlighted by the board Sept. 6, suggests eroding trust in Ascension, as it adds funding for services provided directly by Central Health. The Travis County Commissioners Court will consider the budget for approval Sept. 12 and 19.

Central Health made its issues with the nonprofit clear in January when the district sued Ascension, claiming breach of contract. The two were partners when CH formed in 2004, but Central Health says that Ascension has been shorting them since 2015, by serving fewer and fewer Medical Access Program (MAP) patients. They cited a 21% reduction in services from 2013 to 2022. Ascension immediately countersued, claiming that Central Health was really the entity in breach of contract, because Ascension was paid enough to handle 25,000 MAP patients but is now responsible for 29,000 MAP patients. Central Health came back saying, basically: nice try, but you only served 14,000 MAP patients in 2022, so where is the money for those thousands of untreated patients going?

Now, Central Health wants to take back direct control of services they offer, which is how most other health care districts in the state already operate. To that end, in the FY24 budget, they dedicate $29.3 million out of a total of more than $360 million in expenditures to build out new clinics and services as part of their seven-year Health Equity Action Plan. New clinics include the already-planned Rosewood-Zaragosa Clinic and the Hornsby Bend Health and Wellness Center.

To fund all this, Central Health will dip into its $400 million reserves, which are currently under audit by the county (the last two audits came back clean). It has also approved a tax rate increase of 6.5% over last year, which translates to a $56 annual increase for the average homeowner. Former council member and current board member Ann Kitchen brought an amendment for a one-time infusion of $7 million to go to Integral Care, the county’s mental health provider for low-income patients, to stave off layoffs, after Mayor Kirk Watson recommended the infusion in his newsletter. There was some discussion about whether it will truly be one-time or will be expected again in the next budget cycle, but Kitchen urged that funding Integral Care is consistent with the mission of Central Health to provide services for low income residents and, “I do not believe is going to hurt our long-term plan.”

In an aggressive social media campaign, Ascension alleges that Central Health is trying to take over Seton hospital with its “massive war chest” of reserves. If a judge finds that Ascension breached its contract to provide services, it would allow Central Health to pursue ownership of the hospital. But even if they chose to, they would still have to buy the hospital from Ascension and could also choose to build an acute care hospital where they can provide services directly.

As for dipping into reserves, Central Health argued in its lawsuit that “reserves are for patient care, not corporate profit … Ascension apparently wants Central Health to use its reserves to pay Ascension more for doing less. It is not financially responsible for Central Health to forgo its reserves to further increase profits of the largest, most profitable non-profit hospital system in the U.S.”