Thursday, July 30, 2009


An article in today's New York Times highlights a single hospital in McAllen, Texas, that appears to be having a disproportionate impact on the health care debate in the form of the amount of money they're throwing at both Democrats and Republicans in an effort to soften the pending legislation:

One of the largest sources of campaign contributions to Senate Democrats during this year’s health care debate is a physician-owned hospital in one of the country’s poorest regions that has sought to soften measures that could choke its rapid growth.

The Democratic Senatorial Campaign Committee collected nearly $500,000 at a reception here on March 30, mostly from physicians and others affiliated with Doctors Hospital at Renaissance, financial disclosure records show.

The event was held at the home of a prominent McAllen developer, Alonzo Cantu, a hospital founder, investor and board member who has raised prodigious sums from the Rio Grande Valley for an array of Democrats.

Another event at Mr. Cantu’s home, in September 2007, brought in at least $800,000 for the committee’s House counterpart, the Democratic Congressional Campaign Committee, according to disclosure reports. The House speaker, Nancy Pelosi, was in attendance and cut a ribbon at the hospital’s new women’s center while in town.

The hospital, which is in Edinburg, adjacent to McAllen, is working both sides of the aisle. Its political action committee, Border Health PAC, split $120,000 last year among House and Senate candidates, including Republicans.

Although Congressional negotiations over health care legislation are continuing, Doctors Hospital seems to be getting much of what it wants. Thus far, physician-owned hospitals have been insulated from some of the most onerous potential restrictions in the health care legislation moving through Congress.

The reporters note the highly unflattering portrait of the hospital in this New Yorker column by Atul Gawande, a column I read just a few days ago (and that I highly recommend.) Gawande describes this meeting with the CEO of the aforementioned Doctors Hospital:

So I asked him why McAllen’s health-care costs were so high. What he gave me was a disquisition on the theory and history of American health-care financing going back to Lyndon Johnson and the creation of Medicare, the upshot of which was: (1) Government is the problem in health care. “The people in charge of the purse strings don’t know what they’re doing.” (2) If anything, government insurance programs like Medicare don’t pay enough. “I, as an anesthesiologist, know that they pay me ten per cent of what a private insurer pays.” (3) Government programs are full of waste. “Every person in this room could easily go through the expenditures of Medicare and Medicaid and see all kinds of waste.” (4) But not in McAllen. The clinicians here, at least at Doctors Hospital at Renaissance, “are providing necessary, essential health care,” Gelman said. “We don’t invent patients.”

Then why do hospitals in McAllen order so much more surgery and scans and tests than hospitals in El Paso and elsewhere?

In the end, the only explanation he and his colleagues could offer was this: The other doctors and hospitals in McAllen may be overspending, but, to the extent that his hospital provides costlier treatment than other places in the country, it is making people better in ways that data on quality and outcomes do not measure.
“Do we provide better health care than El Paso?” Gelman asked. “I would bet you two to one that we do.”

Or maybe not, says Gawande earlier in his piece:

...there’s no evidence that the treatments and technologies available at McAllen are better than those found elsewhere in the country. The annual reports that hospitals file with Medicare show that those in McAllen and El Paso offer comparable technologies—neonatal intensive-care units, advanced cardiac services, PET scans, and so on. Public statistics show no difference in the supply of doctors. Hidalgo County actually has fewer specialists than the national average.

Nor does the care given in McAllen stand out for its quality. Medicare ranks hospitals on twenty-five metrics of care. On all but two of these, McAllen’s five largest hospitals performed worse, on average, than El Paso’s. McAllen costs Medicare seven thousand dollars more per person each year than does the average city in America. But not, so far as one can tell, because it’s delivering better health care.

Gawande highlights McAllen, and Doctors Hospital in particular, because they are an example of a system where doctors have every financial incentive to order as many tests and procedures as possible and so drive up the cost of health care per patient. He contrasts this with the "holistic" approach of the Mayo Clinic, which focuses on the particular outcome of each patient but-more importantly-structures the payment system so that doctors are not rewarded for the more tests they order or procedures they perform. Unfortunatley none of the current health care reform plans being mulled over by Congress tackle this problem directly, so we could be faced with massive reform that fails to drastically curtail medical expenses. Which is exactly what the physicians at Doctors Hospital want, of course.

1 comment:

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