High Costs In McAllen Prompt Inquiries Into Physician Ownership, Self-Referral And A Major Lobbying Campaign

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Lobbying efforts by Doctors Hospital at Renaissance, in Edinburg, Texas, have steered hundreds of thousands of dollars to key lawmakers in hopes of blocking reforms that would restrict ownership of hospitals by physicians, the Associated Press/Dallas Morning News reports in a follow up to an article in yesterday's New York Times. Doctor-owned hospitals "have been blamed for helping drive up health care costs." The hospital in question was "featured in a June article by The New Yorker that singled the area out for some of the highest health care costs in the country." The article has become a talking point for the White House on reform (7/30).

Now, Rep. Michael Burgess, R-Texas, has asked for a Government Accountability Office report on the Edinburg area's high Medicare costs, the San Antonio Express-News reports. Spending under the federal program is nearly double the national average in the area, which includes McAllen. "I am concerned that without an independent analysis and without further examination of what exactly is taking place in McAllen's health care spending, Congress will be inclined to make broad assumptions that lead to inappropriate legislative decisions about how to control costs in health care," Burgess, a doctor himself, said in a written statement.

The New Yorker article had concluded that high utilization rates of medical services lead to the high costs. "Patients also got two to three times as many pacemakers, implantable defibrillators, and heart bypass operations, and five times as many home health care visits," the Express-News reports (Brezosky, 7/30).

A Texas Monthly report expands on the details of Doctors Hospital's lobbying campaign: "The Doctors Hospital group is obviously well connected: Its board hosted Speaker of the House Nancy Pelosi in 2007 for the grand opening of its new Women's Hospital." A "key" hospital investor had contributed $6,600 dollars to the Democratic Congressional Campaign Committee the same month.

A hospital-connected political action committee, Border Health PAC, has shown its "largess" locally, too. Contributions have included $75,000 to Gov. Rick Perry and $25,000 each to Lieutenant Governor David Dewhurst and former House Speaker Tom Craddick since 2006, the Texas Monthly reports. One Texas lawmaker has been indicted for charges including failing to report a retainer he received from the McAllen Medical Centerl, leading the magazine to conclude, "Undoubtedly, political influence has been brought to bear on the federal issue of physician-owned facilities and the state issue of managed care" (Hart, 7/30).

Meanwhile, "efforts to control medical practices that have driven up expenses, including physician "self-referrals," underscore how difficult it is to alter entrenched patterns," the Washington Post reports. One group of Iowa urologists, for instance began ordering 700 percent more CT scans for their patients after buying their own CT scanner. "A host of studies and reports by academics and the federal government shows that physicians who own scanners order many more scans than those who do not. As a result, Americans pay billions of dollars in extra taxes and insurance premiums" (Vedantam, 7/31).

This information was reprinted from kaiserhealthnews.org with kind permission from the Henry J. Kaiser Family Foundation. You can view the entire Kaiser Daily Health Policy Report, search the archives and sign up for email delivery at kaiserhealthnews.org.

© Henry J. Kaiser Family Foundation. All rights reserved.

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