Hospital District in County Hands

Sidestepping any potential conflicts of interest with the city of Austin, the Travis Co. Hospital District Board of Managers on Tuesday tapped a county employee to fill its interim administrative post. Executive First Assistant County Attorney Jim Collins will serve as the district's temporary administrator on a part-time basis, while continuing his county role as the board's chief counsel. He'll be paid $5,000 a month while the board searches for a full-time administrator.

Because City Hall, and not the county, has long been responsible for local public health care, it was widely expected that the interim post would go to a city executive with hands-on expertise to facilitate the transition to an independent district. Several board members had initially eyed the city's outgoing chief financial officer, John Stephens, for the job, but backed away from that idea after controversy erupted over the city's commitment to transfer only $3 million in cash reserves to the hospital district, far less than county leaders and the Board of Managers had anticipated. The county's pique was aggravated by the city's transfer in 2002 – when plans for the district were just getting off the ground – of $33 million formerly booked to Brackenridge Hospital into the city's General Fund, where it now sits as a "budget stabilization reserve."

As that funding controversy played out last week, the idea of hiring a city employee to run the district started to take on a "nuclear glow," as one insider put it. So the board turned to the county's Collins, who has publicly stayed above the fray on the $33 million question. As well, the Board of Managers still needs to negotiate an interlocal agreement with the city, which will continue to run the city-county clinic system, and may also pursue additional funding from the city. So logic held that a current city staffer might not be the best person to enter into deal-making talks with City Hall.

Also on Tuesday, the board continued grappling with the question of how much money it really needs to establish a healthy reserve fund – and where that money would come from. City Hall number crunchers – including Council Member Betty Dunkerley, the city's former CFO and the architect of its current health care funding system – laid out their position that 5% or 6% of the district's estimated $74 million budget is enough to establish a reserve. So far, the city has contributed $3 million and the county just under $1 million. But the board also heard opposing viewpoints on Monday, as county budget officials argued that an 11% reserve – the county's standard practice – should be maintained. County financial adviser Ladd Pattillo suggested that even 11% might not be enough reserve, given the unpredictable nature of public health care. The board will hold a hearing on its proposed budget at 6pm Wednesday, Sept. 1 in the Commissioners Court's hearing room, 314 W. 11th. Still up in the air is whether the city and county would be willing to put up more funding for the district to circumvent the politically awkward task of asking taxpayers for more money.

On a related matter, at least three board members took issue with points made by city staff during budget discussions at last week's City Council meeting. They said the presentation implied that the city was actually transferring $10 million to the hospital district, which includes the $3 million in reserves. Manager Tom Young, a former Brackenridge administrator, suggested that the city was taking credit for providing an additional $7 million, when in fact that sum would be generated from the higher taxes that will be paid by county residents outside the city. Rosa Mendoza, a CPA and city appointee to the district board, said she replayed a videotape of the budget presentation several times to try to understand how the city arrived at its $10 million "contribution." Another manager, Dr. Donald Patrick, summed things up. "Obviously," he said, "that's an illusion."

Other budget concerns brought to the board included county Probate Judge Guy Herman's plea for increased funding levels to ensure equitable health care for all county residents, including undocumented residents and homeless citizens. Currently, the county allows access to its Medical Assistance Program for all patients, regardless of residence status, who meet income eligibility guidelines; the city does not, instead using much more stringent federal minimum requirements. The district needs to adopt a uniform MAP coverage standard, and using the county's current rules would cost the district an additional $19 million, according to city estimates. Herman, who led the effort to create a countywide hospital district, also urged the board to maintain a front-and-center approach to mental health care issues, given the drastic budget cuts at the state level. "We do have a mental health care crisis," Herman said. "Not just in Travis County but in this state."