Via "Inquest: An Examination of Central Health"

Are the poor subsidizing the University of Texas?

A new documentary alleges that $280 million reserved for indigent healthcare and hospitalization in Austin has been improperly diverted to Dell Medical School.


In November 2012, Austin voters were asked to approve a proposition that promised to expand health care for the poor. They approved a ballot measure creating a pool of $35 million in tax money each year for the nonprofit Central Health, an agency charged by the state with funding indigent health care and hospitalization in Travis County. Voters were told that the money would go to a new medical school at the University of Texas, where the poor would be treated.

But in 2017, Travis County taxpayers filed a lawsuit claiming that voters had been duped and that little or none of that money had been spent for clinical care; instead it was funding UT administration, research and support salaries. That lawsuit is ongoing. A short documentary, called “Inquest: An Examination of Central Health,” has now been released on YouTube. The Observer spoke with attorney and activist Fred Lewis, who with Austin filmmaker Steve Mims and Brian Rodgers, co-produced the 30-minute film that raises tough questions about whether liberals in the state capital broke laws and sold out the poor in a quest for economic development.

This interview has been edited and condensed for publication. 

Texas Observer:  The documentary alleges that $280 million intended by law for the care of the poor in Austin already has been transferred to UT’s Dell Medical School for administrative salaries and other expenses that are not directly related to care of the poor. You’re involved in a lawsuit, why did you and others put together a documentary?

Fred Lewis: Civil lawsuits are very complicated. This has been slowed down by the pandemic, a lawyer’s death, illness and then it’ll be appealed. So, the legal system is a slow remedy. The public needs to be aware. They need to know what their officials have done. They need to decide if this comports with their values. And then, the Travis County commissioner’s court has financial oversight over Central Health, and they could replace the current board members or require an audit of Central Health such that we would know exactly how much health care they’d gotten for poor people for $280 million.

Can you catch us up a little bit on the history of the relationship between Dell Medical School and Central Health?

Lewis: Austin used to be a town with an economy based on government and education as the capital and the home of the University of Texas and other schools. We diversified in the 1990s with high tech, and then we had a high tech bust at the turn of the century. So, the business community wanted to expand into biomedical innovation. But to do that, you need a new teaching hospital and a medical school. And we didn’t have either. They couldn’t get the Legislature to fund it. They couldn’t get the Legislature to authorize Central Health to fund it. So, they came up with this scheme.

Why did you and some of the other Austin leaders featured in the film initially support a real estate tax increase to provide $35 million a year—money that the Central Health board agreed would then be transferred to the university?

Lewis: They basically promised that the $35 million a year from Central Health was going to the medical school to provide healthcare for poor people. So, I don’t think there was much opposition from the Central Health Board. At the time, I supported the proposition. I don’t know if it came across in the film, but they said repeatedly the money was going to be earmarked for the poor for health care.

The bottom line is there’s nothing wrong with Central Health paying a reasonable amount of money for medical care for poor people provided by medical school. That  happens in hospital districts across the state. What’s not legal is for Central Health … to provide money to the University of Texas Dell Medical School for things that have absolutely nothing to do with health care.

The 30-minute film features several prominent Austin activists who all raise concerns, including attorney Bob Ozer, former State Senator Gonzalo Barrientos,  Nelson Linder, of the NAACP and Frank Rodriguez, a former Central Health board member. Ozer was always an opponent. But can you explain why you and others became convinced that these annual $35 million transfers violate state laws that limit what Central Health, as a public health district, can legally fund?

Lewis: In 2016, Bob Ozer, an attorney, who I’ve known a long time, asked me to get involved on some ethics issues regarding Central Health. I don’t even remember the details. And in the middle of that, I said to Bob, ‘How much health care is the medical school providing to the poor for what was then a total of $105 million?’ 

And Bob said, ‘I don’t know. Nobody knows.’ 

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I sent open records requests to both Central Health and UT Medical School, and I got back: they had no medical records showing how much medical treatment in the aggregate or any other way had been provided to poor people. And that’s when I knew something was horribly, horribly wrong.

We weren’t asking for individual patient records. We’re asking for how many people were treated in the aggregate. You know, how many visits, surgeries, etc. And when I didn’t get it, I suspected there wasn’t any medical care being provided.

That’s when I sent another open records request, asking for whose salary at the medical school was being paid for by Central Health with poor people’s dollars, and I got back the development department, the communications department and essentially anybody and everybody that you wanted to fund that didn’t have anything to do with healthcare for the poor. In late 2016 or early 2017, I went through all the records and 84 percent of the salaries at that time at the medical school were paid for with Central Health dollars.

The documentary explains that Central Health started transferring $35 million before the medical school even opened in 2015. It also explains that these annual transfers could continue for 20 years or more.

Lewis: The medical school had been receiving $105 million, [before] it was even operational or providing health care yet. In other words, they were banking the money because when the medical school opened, they would need it to draw down. But there was no health care being provided, there was no medical school.

In 2017, Travis County taxpayers sued Central Health challenging the transfers as illegal and seeking an injunction to stop them. You’re one of the attorneys for that case. The lawsuit calls iron-clad assurances that these funds will be used for poor people’s health care only. What’s the status of the lawsuit? I know it’s been slowed down by COVID-19 and by the death of another attorney.

Lewis: We’re hoping that by late spring, we can try it to the court … one side will say  Central Health, as a nonprofit entity, has sovereign immunity, and we say they don’t because the expenditures are illegal because they can’t spend it on anything other than health care to the poor. And hopefully some court will decide.

Could Travis County Commissioners Court take any action in the meantime?

Lewis: Yes. In the past, we got two votes to do an audit of how much health care for the poor was received for the $35 million a year from the medical school. We needed three. We’re going to go back since there are two new commissioners. We’re asking for an independent third-party audit so the public will know how much medical care has been provided for the $280 million (already transferred). I suspect the answer is next to nothing.

I also think county commissioners need to put more poor people on public health boards. Or poor people’s representatives, because I don’t think if you have the poor people’s interests at heart, you would have voted for this.

The documentary claims that the $35 million that Central Health transfers every year to the medical school could provide annual health coverage to 35,000 – 50,000 poor, uninsured residents in Travis County — “preventing unnecessary deaths, illness, and suffering.”  On top of the annual $35 million, UT also is charging Central Health for providing clinical care for the poor. Do you know how much?Lewis: UT is clearly charging Central Health directly and indirectly for health care for the poor…how much is so obscured that we’re going to have to find out in depositions. But it is clear that they’re doing it. It is not clear how much money it is. It’s certainly at least $3 million a year, and it may be more.